General Motors provides long term disability insurance for this employee. The contract states that this employee will earn $3000 per month ($36,000 per year) if they become disabled. General Motors paid the entire premium cost of $1000 per year. If this employee should become disabled, what would be their yearly personal income tax liability?
General Motors provides long term disability insurance for this employee. The contract states that this employee will earn $3000 per month ($36,000 per year) if they become disabled. General Motors paid the entire premium cost of $1000 per year. If this employee should become disabled, what would be their yearly personal income tax liability?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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General Motors provides long term disability insurance for this employee. The contract states that this employee will earn $3000 per month ($36,000 per year) if they become disabled. General Motors paid the entire premium cost of $1000 per year. If this employee should become disabled, what would be their yearly personal income tax liability?
A. $0
B. $300
C. $900
D. $3600
E. $10,800
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