Ben's employer offers employees the following benefits.What amount must Ben include in his gross income? $\begin{array} { l l }
{ \text { Benefit } } & \text { Value } \
\text { Health insurarice coverage } & \$ 5,800 \
\text { Group-temn life insurarnce } ( \$ 50,000 ) & 4,270 \
\text { Disability insurance coverage } ( \text { considered purchased by Ben) } & 3,600 \
\text { Whole life insurarice coverage } ( \$ 100,000 ) & 7,000
\end{array}$

Question

Ben's employer offers employees the following benefits.What amount must Ben include in his gross income? $\begin{array} { l l } 
 { \text { Benefit } } & \text { Value } \
\text { Health insurarice coverage } & \$ 5,800 \
\text { Group-temn life insurarnce } ( \$ 50,000 ) & 4,270 \
\text { Disability insurance coverage } ( \text { considered purchased by Ben) } & 3,600 \
\text { Whole life insurarice coverage } ( \$ 100,000 ) & 7,000
\end{array}$

Quizplus · Accepted Answer

Only the value of the group-term life insurance in excess of $50,000 must be included in gross income. Therefore, Ben must include $4,270 - $50 (the cost of the first $50,000 of coverage provided by his employer) = $4,220 in his gross income. The other benefits (health insurance, disability insurance, and whole life insurance) can be excluded from gross income. Therefore, Ben must include a total of $3,600 + $4,220 + $7,000 = $14,820 in his gross income. However, the question is asking for the amount that Ben must include in his gross income, so the correct answer is $14,820 - $4,220 (the amount already included for the group-term life insurance) = $10,600, which is choice C.

Ben's Employer Offers Employees the Following Benefits A)$9,400 B)$11,070 C)$10,600 D)$7,000 E)Zero-None of These Benefits Are Included

Ben's Employer Offers Employees the Following Benefits A)$9,400
B)$11,070
C)$10,600
D)$7,000
E)Zero-None of These Benefits Are Included