Individual Income Taxes
Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 9, Problem 49P
To determine

Explain the issues that should have an impact on Ms. A’s choice.

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For each independent situation, determine the amount, if any that is includible in the gross income of the employee. The employee of a motel has the choice of free lodging on the premises (fair market value $400 per week) or extra cash compensation. He is not required to live on premises. He chooses the lodging. An employee arranges to have his annual bonus, $1,000, paid directly to his son. His objective is to make a wedding gift to the son. An employee earns a salary of $500 per week. Pursuant to a court order, $100 of his salary goes to his ex-wife for child support.
Mary's job position is being transferred to Lexington, Kentucky from Orlando, Florida. She andher husband George are currently renting their home in Orlando, but they have decided that they want to purchase a home in Lexington. Mary's annual salary is $48,500. George has also beenable to find employment in Lexington at a factory making $39,000 per year. Mary is a planner and has saved $6200 that she can use towards the down payment on the new house. Use the above information to answer the following questions. Round all answers to 2 decimal places. 1. To save the down payment, Mary deposited monthly in a savings account earning 2.5% compounded monthly. If it took Mary 5 years to save up the down payment,how much money was Mary depositing each month? 2. If Mary and George don't want to spend more than 15% of theirmonthly income on their house payment, what is the maximum monthly payment they can afford?
Jessica is a professional consultant. She agrees to consulting services for Joe for $2,000. After she finishes, Joe does not have cash to pay Jessica, but he has an antique, collectible baseball card with a fair market value of $2,000 that he gives her to satisfy the payment. The baseball card cost Joe $500. How much should Jessica include in her gross income?

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Individual Income Taxes

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