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 the $6,000 owed on James's credit card. 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 toward a nursing home or similar facility. What is James's gross income from the above

Answer 1

Answer: $72,000

Step-by-step explanation:

Gross income simply refers to the total income that is earned by an individual before taxes and every other deductions are made from the income earned. Gross income include wages, salaries, dividends, rental income, and interest income.

Based on the above explanation, James's gross income from the above will be $72000 which is his actual salary. This means the actual salary consist of every other income since his salary is $66000.