During 2020, Nellie Ward receives from her current employer: • A $400 gift certificate for online retailer Amazon.
• A $600 reclining easy chair for outstanding customer service during the year.
• A set of 4 coffee mugs with the employer's logo etched on the side. These mugs cost the employer $20.
• An Easter basket of gourmet treats valued at $245.
• A cash award of $300 in recognition of 10 years of service with the employer.
What is the amount that will be included in Nellie's 2020 Net Income For Tax Purposes due to the gifts?

Question

Quizplus · Accepted Answer

The value of the gifts that will be included in Nellie's 2020 net income for tax purposes is:
- Amazon gift certificate: $400
- Reclining easy chair: $600
- Coffee mugs: $20 (since this is a non-cash gift, the cost of the gift to the employer is used)
- Easter basket: $245
- Cash award: $300

Total value of gifts: $1,565
Therefore, the amount that will be included in Nellie's 2020 Net Income For Tax Purposes due to the gifts is $1,300 (the maximum amount among the options).

During 2020, Nellie Ward Receives from Her Current Employer: •