McGraw-Hill's Taxation of Individuals 3rd Edition by Brian Spilker,Benjamin Ayers,John Robinson,Edmund Outslay ,Ronald Worsham,John Barrick,Connie Weaver

Exercise 8

Matt works for Fresh Corporation.Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year.The menu of benefits is as follows:
For each of the following independent circumstances, determine the amount of income Matt must recognize and the amount of deduction Fresh may claim (ignore FICA taxes):
a.Matt selects the single health insurance and places $10,000 in his 401(k).
b.Matt selects the single health insurance, is reimbursed $5,000 for MBA tuition, and takes the remainder in cash.
c.Matt selects the single health insurance and is reimbursed for MBA tuition of $10,000.
d.Matt gets married and selects the health insurance with his spouse and takes the rest in cash to help pay for the wedding.
e.Matt elects to take all cash.