James, a Cash Basis Taxpayer, Received the Following Compensation and Fringe

question 36

Multiple Choice

James, a cash basis taxpayer, received the following compensation and fringe benefits in the current year: $\begin{array}{lr}\text { Salary } & \$ 66,000 \\\text { Disability income protection premiums } & 3,000 \\\text { Long-term care insurance premiums } & 4,000\end{array}$ His actual salary was $72,000. He received only $66,000 because his salary was garnished and the employer paid the $6,000 owed on James's credit card. The wage continuation insurance is available to all employees and pays the employee three-fourths of the regular salary if the employee is sick or disabled. The long-term care insurance is available to all employees and pays $150 per day toward a nursing home or similar facility. What is James's gross income from the above?

• A) $66,000.
• B) $72,000.
• C) $73,000.
• D) $75,000.
• E) None of these.

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Definitions:

Family of Two

A term used to describe a household consisting of two members, reflecting on their living arrangement, financial planning, and daily life dynamics.

Equitable Hourly Income

An approach towards income distribution where all individuals receive fair wages based on hours worked, ensuring equality.

Minimum Wage

The lowest legal wage that can be paid to most workers, set by law or statute, aimed at protecting the economic well-being of workers.

Fair Compensation

Adequate payment for work performed, ensuring workers receive equitable wages that reflect their contributions and living needs.