Question 1

Kimberly's employer provides her with a personal travel allowance of $10,000 annually. Her marginal tax rate is 32 percent. Her employer has a marginal tax rate of 21 percent. What is Kimberly's after-tax benefit, ignoring payroll taxes?

Accepted Answer

The answer of Kimberly's employer provides her with a personal...

Question 2

Annika's employer provides each employee with up to $200 of monthly vouchers for public transportation. What is the amount that Annika must include into income with respect to her benefit in 2020?

Accepted Answer

The answer of Annika's employer provides each employee with up...

Question 3

Lina, a single taxpayer with a 35 percent marginal tax rate, desires health insurance. The health insurance would cost Lina $8,000 to purchase if she pays for it herself (Lina's AGI is too high to receive any tax deduction for the insurance as a medical expense). Lina's employer has a 21 percent marginal tax rate. What is the maximum amount of before-tax salary Lina would give up to receive health insurance? (Round your answer to the nearest whole number.)

Accepted Answer

The answer of Lina, a single taxpayer with a 35...

Question 4

Hope's employer is now offering group-term life insurance. The company will provide each employee with $200,000 of group-term life insurance. It costs Hope's employer $700 to provide this amount of insurance to Hope each year. Assuming that Hope is 27 years old, use the table to determine the monthly premium that Hope must include in income as a result of receiving the group-term life benefit.
EXHIBIT 12-10 Uniform Premiums for $1,000 of Group-Term Life Insurance Protection:

Accepted Answer

The answer of Hope's employer is now offering group-term life...

Question 5

Corinne's employer offers a cafeteria plan that allows employees to choose among a number of benefits. Each employee is allowed $12,280 in benefits. For the current year, Corinne selected $4,520 of health insurance, $5,520 of dependent care, $1,040 in 401(k)contributions, and $1,200 of cash. How much must Corinne include in taxable income?

Accepted Answer

The answer of Corinne's employer offers a cafeteria plan that...

Question 6

Rick recently received 545 shares of restricted stock from his employer, Crazy Corporation, when the share price was $14 per share. Rick's restricted shares vested three years later, when the market price was $21. Rick held the shares for a little more than a year and sold them when the market price was $24. What is the amount of Rick's gain on the sale of the stock? Assuming a marginal tax rate of 37 percent, what is Rick's tax on the sale of the stock?

Accepted Answer

The answer of Rick recently received 545 shares of restricted...

Question 7

Frederique works for a furniture retailer. The shop allows all employees to purchase 10 pieces of furniture per year at a discount. This year Frederique purchased eight pieces. She gave three pieces as a gift to her brother as a wedding present. Her employer's average gross profit percentage is 25 percent. Each piece was 20 percent off of normal retail prices and in all cases the employee price exceeded the employer's cost. What amount of the discount must be included in Frederique's income?

Accepted Answer

The answer of Frederique works for a furniture retailer. The...

Question 8

Rick recently received 600 shares of restricted stock from his employer, Crazy Corporation, when the share price was $25 per share. Rick's restricted shares vested three years later, when the market price was $32. Rick held the shares for a little more than a year after vesting and sold them when the market price was $35. What is the amount of Rick's compensation income if Rick made an election under section 83(b)when the stock was granted? Assuming a marginal tax rate of 35 percent, what is the amount of Rick's ordinary income amount and tax liability at the time of the income inclusion?

Accepted Answer

The answer of Rick recently received 600 shares of restricted...

Question 9

Jane is an employee of Rohrs Golf Emporium. The shop allows employees to purchase equipment at significant discount. This year, Jane purchased several new items to improve her game.
  If the employer's average gross profit percentage is 25 percent, what amount must Jane include in income?

Accepted Answer

The answer of Jane is an employee of Rohrs Golf...

Question 10

Annika's employer provides each employee with up to $195 of monthly vouchers for public transportation. What is the amount that Annika must include into income with respect to her benefit in 2020?

Accepted Answer

The answer of Annika's employer provides each employee with up...

Question 11

Jane is an employee of Rohrs Golf Emporium. The shop allows employees to purchase equipment at significant discount. This year, Jane purchased several new items to improve her game.
  If the employer's average gross profit percentage is 30 percent, what amount must Jane include in income?

Accepted Answer

The answer of Jane is an employee of Rohrs Golf...

Question 12

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later, when the market price was $12. Rick held the shares for a little more than a year after vesting and sold them when the market price was $15. What is the amount of Rick's compensation income if Rick made an election under section 83(b)when the stock was granted? Assuming a marginal tax rate of 35 percent, what is the amount of Rick's ordinary income amount and tax liability at the time of the income inclusion?

Accepted Answer

The answer of Rick recently received 500 shares of restricted...

Question 13

Annika's employer provides its employees with parking benefits. The fair market value of the annual parking benefit is $4,800 ($400 per month). What is the amount Annika must include into income with respect to her parking benefit in 2020?

Accepted Answer

The answer of Annika's employer provides its employees with parking...

Question 14

Corinne's employer offers a cafeteria plan that allows employees to choose among a number of benefits. Each employee is allowed $12,000 in benefits. For the current year, Corinne selected $4,500 of health insurance, $5,500 of dependent care, $1,000 in 401(k)contributions, and $1,000 of cash. How much must Corinne include in taxable income?

Accepted Answer

The answer of Corinne's employer offers a cafeteria plan that...

Question 15

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later, when the market price was $12. Rick held the shares for a little more than a year after vesting and sold them when the market price was $15. Assuming that Rick made an election under section 83(b)when the stock was granted and that his marginal tax rate is 24 percent, what is the amount of Rick's income inclusion and tax liability upon the sale of the stock?

Accepted Answer

The answer of Rick recently received 500 shares of restricted...

Question 16

Kimberly's employer provides her with a personal travel allowance of $26,000 annually. Her marginal tax rate is 32 percent. Her employer has a marginal tax rate of 21 percent. What is Kimberly's after-tax benefit, ignoring payroll taxes?

Accepted Answer

The answer of Kimberly's employer provides her with a personal...

Question 17

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later, when the market price was $12. Rick held the shares for a little more than a year and sold them when the market price was $15. What is the amount of Rick's gain on the sale of the stock? Assuming a marginal tax rate of 37 percent, what is Rick's tax on the sale of the stock?

Accepted Answer

The answer of Rick recently received 500 shares of restricted...

Question 18

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,000 per year)for her so that she can receive her MBA. How much of the $8,000 tuition benefit does Brandy need to include in her income?

Accepted Answer

The answer of Brandy graduated from Vanderbilt with her bachelor's...

Question 19

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,200 per year)for her so that she can receive her MBA. How much of the $8,200 tuition benefit does Brandy need to include in her income?

Accepted Answer

The answer of Brandy graduated from Vanderbilt with her bachelor's...

Question 20

Lina, a single taxpayer with a 35 percent marginal tax rate, desires health insurance. The health insurance would cost Lina $8,200 to purchase if she pays for it herself (Lina's AGI is too high to receive any tax deduction for the insurance as a medical expense). Lina's employer has a 21 percent marginal tax rate. What is the maximum amount of before-tax salary Lina would give up to receive health insurance? (Round your answer to the nearest whole number.)

Accepted Answer

The answer of Lina, a single taxpayer with a 35...

Quiz 12: Compensation

Kimberly's employer provides her with a personal travel allowance of $10,000 annually. Her marginal tax rate is 32 percent. Her employer has a marginal tax rate of 21 percent. What is Kimberly's after-tax benefit, ignoring payroll taxes?

Annika's employer provides each employee with up to $200 of monthly vouchers for public transportation. What is the amount that Annika must include into income with respect to her benefit in 2020?

Jane is an employee of Rohrs Golf Emporium. The shop allows employees to purchase equipment at significant discount. This year, Jane purchased several new items to improve her game. If the employer's average gross profit percentage is 25 percent, what amount must Jane include in income?

Annika's employer provides each employee with up to $195 of monthly vouchers for public transportation. What is the amount that Annika must include into income with respect to her benefit in 2020?

Jane is an employee of Rohrs Golf Emporium. The shop allows employees to purchase equipment at significant discount. This year, Jane purchased several new items to improve her game. If the employer's average gross profit percentage is 30 percent, what amount must Jane include in income?

Annika's employer provides its employees with parking benefits. The fair market value of the annual parking benefit is $4,800 ($400 per month). What is the amount Annika must include into income with respect to her parking benefit in 2020?

Kimberly's employer provides her with a personal travel allowance of $26,000 annually. Her marginal tax rate is 32 percent. Her employer has a marginal tax rate of 21 percent. What is Kimberly's after-tax benefit, ignoring payroll taxes?

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,000 per year)for her so that she can receive her MBA. How much of the $8,000 tuition benefit does Brandy need to include in her income?

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,200 per year)for her so that she can receive her MBA. How much of the $8,200 tuition benefit does Brandy need to include in her income?