James,a cash basis taxpayer,received the following compensation and fringe benefits in the current year:
Salary
$66,000
Disability income protection premiums
3,000
Long-term care insurance premiums
4,000

His actual salary was $72,000.He received only $66,000 because his salary was garnished and the employer paid $6,000 on James's credit card debt he owed.The wage continuation insurance is available to all employees and pays the employee three-fourths of the regular salary if the employee is sick or disabled.The long-term care insurance is available to all employees and pays $150 per day towards a nursing home or similar facility.What is James's gross income from the above?

Question

James,a cash basis taxpayer,received the following compensation and fringe benefits in the current year:
Salary
$66,000
Disability income protection premiums
3,000
Long-term care insurance premiums
4,000
​
His actual salary was $72,000.He received only $66,000 because his salary was garnished and the employer paid $6,000 on James's credit card debt he owed.The wage continuation insurance is available to all employees and pays the employee three-fourths of the regular salary if the employee is sick or disabled.The long-term care insurance is available to all employees and pays $150 per day towards a nursing home or similar facility.What is James's gross income from the above?

Quizplus · Accepted Answer

James's gross income includes his entire salary of $72,000, regardless of the garnishment for credit card debt. The disability income protection and long-term care insurance premiums paid by the employer are not included in gross income as they are considered non-taxable fringe benefits.

James,a Cash Basis Taxpayer,received the Following Compensation and Fringe Benefits