Question

What is Anne’s total gross income if: 1) her employer reimbursed her for $100 of her job related moving expenses; 2) she had a $200 gain when she sold her home after living in it for 10 years; and 3) she saved $300 by having her son at her employer’s daycare facility?

What is Mark’s total gross income if: 1) he had a $100 gain from selling his home he owned for less than 2 years because someone broke into house and committed suicide; 2) he received $200 of unemployment compensation; and 3) when his wife died, he received $300 of death benefits from her employer?

What is Harry’s total gross income if: 1) as airline pilot, he flew free on a flight to Chicago, which was worth $100; 2) he received $200 worth of workers’ compensation; and 3) his employer, the airlines reimbursed his $300 tuition for attending flight safety course?

What is Navy Seal, Shane’s total gross income if: 1) the Navy reimbursed him $100 for moving overseas as per Navy’s orders; 2) he made $40 worth of phone calls on his office phone; and 3) the Navy paid the $300 premiums due his life insurance policy, which was provided by the Navy.

Answer 1

Part (a) - Reimbursement received from employer for the relocation for job purpose is part of your Gross total income, hence to be included.

(b) Gain on selling of home after living in that for 10 years is exempt from tax hence not to be included in the gross total income.

(C) Notional savings are not part of the gross total income.

Based on above Gross total income will be $100.

Part B

(a) Gain received on selling of home wothin 2 year is taxable hence should be included in the gross total income. (b) Unemployment compensation received is taxable, hence to be included in GTI.

(c) Death benefits received from wife's employer are not taxable in teh hamds of the legal heir, hence should not be included in GTI.

GTI= 100+200= $300

Part C

(a) Notinal benefits are not included in GTI hence flight attended during the course of teh job should not be included in GTI.

(b) Worker's compensation taxable, hence to be icluded in GTI.

(c) Amounts paid by employer for onjob training are not included in GTI.

hence GTI= 200

Part (d)

Overseas cost of living allowances is not included in GTI.

Perquisites used/provided for and on Job are not included in the GTI.

Life insurance premium paid by Navy is not included in GTI

Hence GTI will be NIL