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:
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 these.

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