What Are the Tax Problems Associated with Payments Received by a Wife

question 71

Essay

What are the tax problems associated with payments received by a wife from her deceased husband's employer? (Assume the wife renders no services to the employer.)

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Definitions:

Sales Tax

A tax imposed by a government on the sale of goods and services.

Credit Period

Length of time allowed for payment of goods sold on account.

Discount Period

The time frame in which a payment can be made at a reduced rate.

Contra-revenue Account

An account that offsets revenue accounts on the income statement, such as sales returns, allowances, and discounts.