chpt 5 HW solutions

chpt 5 HW solutions - excluded from gross income pp 5-6 5-7...

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Individual Tax Accounting – 2011 edition Chapter 5 Homework Solutions 31. a. $50,000 salary plus $2,500 bonus taxable as compensation for services. b. $10,000 as compensation. A payment from the employer cannot qualify as a gift. The payment does not qualify as a scholarship since the amount was paid to the mother rather than to the student. There also could be an issue with discrimination. c. The $15,000 was received as a result of the wife’s services to the employer. Therefore, the payment is included in Edmund’s gross income as compensation. d. Zero. Life insurance proceeds paid to the beneficiary upon death of the insured are
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Unformatted text preview: excluded from gross income. pp. 5-6, 5-7, 5-9, and 5-10 36. a. Leigh must include in gross income the punitive damages of $50,000. The other amounts ($15,000 and $8,000) may be excluded as arising out of the physical injury, except the $1,000 amount received for damage to her automobile. This amount is a nontaxable recovery of capital (i.e., it reduces her basis for the automobile by $1,000). b. The $40,000 is included in Leigh’s gross income because it did not arise out of a physical personal injury. pp. 5-11 and 5-12...
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