Question

2.) Isse peking is a manager of Airline Highway Motel.
Isse lives in Unit 12.He was given the option to live at the motel if he would also look after the night auditing(the value of his reviews is $ 400 per month).
Responsibilities. The value of the motel unit on a monthly basis is $ 800 but unit 12 rents on a daily basis for $ 100 per day.How much if any does ISSE have to include in his gross income for living on the premises of his employer.?

a.)$0 lodging for the convenience of the employer.
b.)$400 per month
c.)$800 per month
d.)$3000 per month


3.)Meredith is an employee of a large company.The company has a healthy facility on its,premises,for the exclusive use of its employees and their dependents.A comparable private health club membership at a public facility would cost $ 2,400 per year.How much,if any must Meredith include in her gross income if her 10-year old daughter uses the facilities for one half of the year.

a.)$0
b.)$600
c.)$1,200
d.)$2,400


7.)Robin is married to robert and they have one child Angel,age 14 who is in the 6th grade.Angel is a difficult child and she is cared for in the afternoon by the sisters of reformation, a group of catholic nuns.Robbin pays $ 6,000 per year for the child care. Robbins company has a dependent care assistance program.If Robbin makes the maximum use of the dependent care assistance program how much can she exclude from her income if she files a joint return with Robert?

a.)$0
b.)$2,500
c.)$5,000
d.)$6,000


9.) ABC corp provides employees with discount on the flat panel televisions they manufacture.The discounts were established using a length of service and employee status methodology.

Length of service       Employee discount       Officer discount
1-5 years                               10%                           20%
> 5-10 years                           15%                           30%
>10 years                               20%                         40%

The gross profit percentage for ABC is 40%

George is an office employee who has been with ABC Corp for 13 years.For Christmas this year George bought a 56 in ch panel tv that retails for $ 8,000
And he received a discount appropriate to the schedule discounts listed above.For this year how much if any does George have to include in gross income as a result of this transaction?

a.)$0
b.)$1,760
c.)$2,640
d.)$3,520


10.) Baldwin is the president of ZZZ Best carpet cleaners.Baldwin has a home with 18,000 square of floor space.Every week Baldwin has the cleaning crew of ZZZ best carpet cleaners clean his carpets.He theorizes that this is good training for the crew.baldwin’s CPA tells him that he can avoid the inclusion of the value of the services in his gross income if he offers to have employees carpet cleaned at a reduction from retail.Baldwin establishes such a plan and allows a 50% reduction for all employees including himself.This year the total retail value of the cleaning at Baldwins house was $20,000,of which he paid $ 10,000.How much if any must Baldwin include in gross income resulting from the discount?

a.)$5,000
b.)$6,000
c.)$8,000
d.)$10,000


chapter 14-

4.) Jane is covered by a $ 90,000 group term life insurance policy,her daughter is the sole beneficiary.Jane’s employer pays the entire premiums for the policy,the uniform annual premium is $0.60 per $1,000 per month of coverage.How much,if any is W-2 taxable income to Jane resulting from the insurance.

a.)$0
b.)$24
c.)$288
d.)$648


5.) What is the maxium number of employees that a company with a health plan can have and not be subject to the COBRA rules?

a.)10
b.)15
c.)10
d.)20


9.)Split Dollar life insurance is:

a.) an insurance arrangement in which the employee pays the cost of the premium and the employee names the employer as the beneficiary
b.)AN insurance arrangement in which the employer and the employee share the cost of the life insurance on the employee and the portion of the premium that is paid by the employer is the value of the term life portion of the policy.
c.)An insurance arrangement in which the employee pays the majority of the premium while the employer names the beneficiary.
d.)An insurance arrangement in which the employer is the owner of the policy and is also the beneficiary to the extent of the premiums paid by the employer.


12.) NOTCM partnership has 5 partners who have earned into a binding buy/sell agreement that requires and surviving partners to purchase the partnership interest of any partner to die.The partnership uses an entity approach to fund this agreement.How many insurance policies are required to satisfy this agreement.

a.)1
b.)5
c.)10
d.)20


14.) HMO Inc is paying the premium for long term care policies for their 250 employees.How are these payments treated for federal income tax purpose?

a.)Payments for group premiums for long term care are tax deductible to the employer and not taxable income to the employeer.
b.)Payments for group premium for long term care are tax deductible to the employer but are taxable income to the employee based on the coverage schedule..
c.)Payments for the group premiums for long term care are not tax deductible to the employer and not taxable to the employee.
d.)Payments for the group premiums for long term care are not tax deductible to the employer but are taxable income to the employee based on the coverage schedule..

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Question 2.)

Answer c)

Isse is not required to live on the premises by the employer. So this should be included in gross income....

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