Bernie Is a Former Executive Who Is Retired

question 151

Multiple Choice

Bernie is a former executive who is retired. This year Bernie received $250,000 in pension payments and $10,000 of Social Security payments. What amount must Bernie include in his gross income?

• A)$250,000
• B)$255,000
• C)$258,500
• D)$260,000
• E)$0

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Definitions:

Royalties

A share of the income of a business paid by a franchisee to the franchisor.

Innovation

The act of introducing something new, such as an idea, method, or device, to improve processes, products, or services.

C Corporation

An organizational form for businesses where shareholders, the owners, face taxation independently from the corporation.

Shareholders

Individuals or entities that own shares in a corporation, thus having a claim on part of its assets and earnings.