SWFT Individual Income Taxes
43rd Edition
ISBN: 9780357391365
Author: YOUNG
Publisher: Cengage
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- Holly was injured while working in a factory and received 12,000 as workers compensation while she was unable to work because of the injury. Jill, who was self-employed, was also injured and unable to work. Jill collected 12,000 on an insurance policy she had purchased to replace her loss of income while she was unable to work. How much are Holly and Jill each required to include in their gross income?arrow_forwardWhich of the following will result in the recognition of gross income? Gail's employer allows her to set aside $ 4,000 from her wages to cover the cost of daycare for Gail's four-year-old daughter. Gail's daycare costs are $ 4,300 for the year. Hannah purchases a new sofa from her employer, Sofas-R-Us, for $ 1,200. The cost of the sofa to the furniture store is $ 1,100 and the sofa normally sells for $ 1,700. Jayden's employer purchases her commuting pass for the subway at a cost of $ 225 per month. Havana is a lawyer. The law firm she works for pays for her subscription to Lawyer's Weekly, a trade magazine for attorneys. None of the above will result in recognition of gross income.arrow_forwardDuring the last five months of the year, Dwana opens a new Internet telecommunications business called Dwan-Com. Dwan-Com bills 50,000 of revenues, but receives only 40,000 cash. Dwan-Com incurs 3,000 of supply expenses, and 41,000 of labor costs. Dwan-Com pays for 2,200 of the supplies and 38,000 of the labor costs in the current year. a. What is Dwan-Coms taxable income if it elects the cash method of accounting? b. What is Dwan-Coms taxable income if it elects the accrual method of accounting? c. What method of accounting do you recommend that Dwan-Com elect?arrow_forward
- Kim was seriously injured at her job. As a result of her injury, she received the following payments: 5,000 reimbursement from employer-provided health insurance for medical expenses paid by Kim. The premiums this year paid by Kims employer totaled 6,000. 15,000 disability pay. Kim has disability insurance provided by her employer as a nontaxable fringe benefit. Kims employer paid 6,000 in disability premiums this year on behalf of Kim. 10,000 received for damages for personal physical injury. 200,000 for punitive damages. What amount is taxable to Kim? a. 215,000 b. 225,000 c. 236,000 d. 0arrow_forwardIn the current year, Barlow moved from Chicago to Miami to start a new job, incurring costs of 1,200 to move household goods and 2,500 in temporary living expenses. Barlow was not reimbursed for any of these expenses. What amount should Barlow deduct as an itemized deduction for moving expense? a. 0 b. 1,200 c. 2,500 d. 3,700arrow_forwardBen lost his job when his employer moved its plant. During the year, he collected unemployment benefits for three months, a total of 1,800. While he was waiting to hear from prospective employers, he painted his house. If Ben had paid someone else to paint his house, the cost would have been 3,000. The cost of the paint Ben used was 800. What is Bens gross income for tax purposes from the above events?arrow_forward
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