Tommy, a senior at State College, receives free room and board as full compensation for working as a resident adviser at the university dormitory.The regular housing contract is $2,000 a year in total, $1,200 for lodging, and $800 for meals in the dormitory.He had the option of receiving the meals or $800 in cash and accepted the meals.What must Tommy include in gross income from working as a resident adviser?

Question

Quizplus · Accepted Answer

The meals that Tommy received as compensation must be included in his gross income, even though he did not have the option to receive cash instead. The lodging may or may not need to be included depending on whether it is considered compensation for services or a scholarship, but this information is not provided in the question, so we cannot definitively answer whether or not it needs to be included. The other answer choices are incorrect.

Tommy, a Senior at State College, Receives Free Room and Board