Each of the Numbered Items Below Is Accorded Only One

question 105

Multiple Choice

Each of the numbered items below is accorded only one of the following lettered treatments. Use the existing law as it applies to the current year, match the best answer to the statements below.
-Laura's employer pays the first $5,000 in childcare benefits under their childcare assistance plan.

• A)Fully excluded from gross income.
• B)Fully included in gross income.
• C)Partially excluded from gross income.

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Definitions:

Amortization

The gradual reduction of a debt or the spreading out of capital expenses for intangible assets over a period.

Plan Asset Value

The market value of assets that are held within a pension or retirement plan.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or in determining the interest rate charged to financial institutions for loans from the Federal Reserve.

Pension Plans

Financial programs established by employers to provide retirement income to employees.