Question

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?

Answer 1

Consider the following explanation

Step-by-step explanation:

The meals value of $800 should be included in Gross Income the reason being there was option of receiving the same in cash .

The housing value and lodging value should not be included in gross income since it was give as condition of employment as full compensation for working as a resident adviser at the University dormitory.