T earns a salary of $75,000 per year as a CPA. After withholdings of $15,000 for federal income taxes, $5,500 in social security taxes, and $4,500 for state income taxes, she takes home $50,000. a. T realizes $75,000 as income, but recognizes only $50,000. b. T realizes and recognizes $75,000 as income. c. (a) is correct unless T expressly agreed to the withholdings. d. None of the above. Upon T’s request, his employer buys T’s grandmother a new Porsche Cayman in lieu of paying T $66,000 otherwise due to him as a salary (unbeknownst to T, his employer is able to buy the car for $60,000). If T had received the car and then given it to Granny, it would have been excluded from her income as a gift under Section 102. a. T’s grandmother will be required to recognize $66,000 as gross income. b. T will be required to recognize $66,000 as gross income. c. T will be required to recognize $60,000 as gross income. d. T’s employer would be required to recognize income under these facts. e. Both (b) and (d) are correct.
T earns a salary of $75,000 per year as a CPA. After withholdings of $15,000 for
federal income taxes, $5,500 in social security taxes, and $4,500 for state income
taxes, she takes home $50,000.
a. T realizes $75,000 as income, but recognizes only $50,000.
b. T realizes and recognizes $75,000 as income.
c. (a) is correct unless T expressly agreed to the withholdings.
d. None of the above.
Upon T’s request, his employer buys T’s grandmother a new Porsche Cayman in lieu of
paying T $66,000 otherwise due to him as a salary (unbeknownst to T, his employer is
able to buy the car for $60,000). If T had received the car and then given it to Granny,
it would have been excluded from her income as a gift under Section 102.
a. T’s grandmother will be required to recognize $66,000 as gross income.
b. T will be required to recognize $66,000 as gross income.
c. T will be required to recognize $60,000 as gross income.
d. T’s employer would be required to recognize income under these facts.
e. Both (b) and (d) are correct.
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