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

question 71

Multiple Choice

James, a cash basis taxpayer, received the following compensation and fringe benefits in 2012: His actual salary was $72,000. He received only $66,000 because his salary was garnished and the employer paid $6,000 on James's credit card debt he owed. 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 towards 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 the above.

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