Question 1

Corinne's employer offers a cafeteria plan that allows employees to choose among a number of benefits. Each employee is allowed $12,000 in benefits. For the current year, Corinne selected$4,500 of health insurance, $5,500 of dependent care, $1,000 in 401(k) contributions, and $1,000 of cash. How much must Corinne include in taxable income?

Accepted Answer

The answer of Corinne's employer offers a cafeteria plan that...

Question 2

Suzanne received 20 ISOs (each option gives her the right to purchase 20 shares of stock for $12 per share) at the time she started working when the stock price was $13 per share. Three years later, when the share price was $23 per share, she exercised all of her options. If Suzanne holds the shares for ten additional months and sells them when the market price is $30, how much gain will Suzanne recognize on the sale and how much tax will she pay assuming her marginal tax rate is 35 percent?

Accepted Answer

The answer of Suzanne received 20 ISOs (each option gives...

Question 3

Suzanne received 20 ISOs (each option gives her the right to purchase 20 shares of stock for $12 per share) at the time she started working when the stock price was $14 per share. Three years later, when the share price was $23 per share, she exercised all of her options. How much cash willSuzanne need on the exercise date?

Accepted Answer

The answer of Suzanne received 20 ISOs (each option gives...

Question 4

Frederique works for a furniture retailer. The shop allows all employees to purchase 10 pieces of furniture per year at a discount. This year Frederique purchased eight pieces. She gave three pieces as a gift to her brother as a wedding present. Her employer's average gross profit percentage is 25 percent. Each piece was 20 percent off of normal retail prices and in all cases the employee price exceeded the employer's cost. What amount of the discount must be included in Frederique'sincome?

Accepted Answer

The answer of Frederique works for a furniture retailer. The...

Question 5

Annika's employer provides only its executives with parking benefits. The fair market value of the annual parking benefit is $4,800 ($400 per month). What is the amount Annika must include into income with respect to her parking benefit in 2017?

Accepted Answer

The answer of Annika's employer provides only its executives with...

Question 6

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later when the market price was $12. Rick held the shares for a little more than a year after vesting and sold them when the market price was $15. What is the amount of Rick's compensation income if Rick made an election under section 83(b) when the stock was granted? Assuming a marginal tax rate of 30 percent, what is the amount of Rick's ordinary income amount and tax liability at the time of the incomeinclusion?

Accepted Answer

The answer of Rick recently received 500 shares of restricted...

Question 7

Hope's employer is now offering group-term life insurance. The company will provide eachemployee with $200,000 of group-term life insurance. It costs Hope's employer $700 to provide this amount of insurance to Hope each year. Assuming that Hope is 27 years old, use the table todetermine the monthly premium that Hope must include in income as a result of receiving thegroup-term life benefit?EXHIBIT 12-10 Uniform Premiums for $1,000 of Group-Term Life Insurance Protection

Accepted Answer

The answer of Hope's employer is now offering group-term life...

Question 8

Kimberly's employer provides her with a personal travel allowance of $10,000 annually. Her marginal tax rate is 30 percent. Her employer has a marginal tax rate of 35 percent. What is Kimberly's after-tax benefit, ignoring payroll taxes?

Accepted Answer

The answer of Kimberly's employer provides her with a personal...

Question 9

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later when the market price was $12. Rick held the shares for a little more than a year and sold them when the market price was $15. What is the amount of Rick's income on the vesting date? Assuming a marginal tax rate of30 percent, what is Rick's tax on the restricted stock?

Accepted Answer

The answer of Rick recently received 500 shares of restricted...

Question 10

Jane is an employee of Rohrs Golf Emporium. The shop allows employees to purchase equipment at significant discount. This year Jane purchased several new items to improve her game.  If the employer's average gross profit percentage is 30 percent, what amount must Jane include in income?

Accepted Answer

The answer of Jane is an employee of Rohrs Golf...

Question 11

Raja received 20 NQOs (each option gives him the right to purchase 15 shares of stock for $10 per share) from his employer at the time he started working when the stock price was $11 per share. Now that the share price is $20 per share, he intends to exercise all of the options using a same-day sale. What are Raja's after-tax proceeds from the sale if his marginal tax rate is 30 percent?

Accepted Answer

The answer of Raja received 20 NQOs (each option gives...

Question 12

Hazel received 20 NQOs (each option gives her the right to purchase 10 shares of stock for $7 per share) at the time she started working when the stock price was $14 per share. Now that the share price is $20 per share, she intends to exercise all of her options. If Hazel holds the shares for two years and sells them when the market price is $25, how much gain will Hazel recognize on the sale and how much tax will she pay assuming her marginal tax rate is 25 percent?

Accepted Answer

The answer of Hazel received 20 NQOs (each option gives...

Question 13

Hazel received 20 NQOs (each option gives her the right to purchase 10 shares of stock for $7 per share) at the time she started working when the stock price was $14 per share. Now that the share price is $20 per share, she intends to exercise all of her options. How much income will Hazel recognize on the exercise date and how much tax will she pay assuming her marginal tax rate is 25 percent?

Accepted Answer

The answer of Hazel received 20 NQOs (each option gives...

Question 14

Kaijsa received 20 NQOs (each option gives her the right to purchase 30 shares of stock for $8 per share) from her employer at the time she started working when the stock price was $9 per share. Now that the share price is $18 per share, she intends to exercise all of her options. If Kaijsa holds the shares for two years and sells them when the market price is $25, what is the amount of the deduction and tax savings her employer will receive (assume the employer's marginal tax rate is 30 percent)?

Accepted Answer

The answer of Kaijsa received 20 NQOs (each option gives...

Question 15

Hazel received 20 NQOs (each option gives her the right to purchase 10 shares of stock for $7 per share) at the time she started working when the stock price was $14 per share. Now that the share price is $20 per share, she intends to exercise all of her options. How much cash will Hazel need on the exercise date?

Accepted Answer

The answer of Hazel received 20 NQOs (each option gives...

Question 16

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later when the market price was $12. Rick held the shares for a little more than a year and sold them when the market price was $15. What is the amount of Rick's gain on the sale of the stock? Assuming a marginal tax rate of 39.6 percent, what is Rick's tax on the sale of the stock?

Accepted Answer

The answer of Rick recently received 500 shares of restricted...

Question 17

Rick recently received 500 shares of restricted stock from his employer, Crazy Corporation, when the share price was $5 per share. Rick's restricted shares vested three years later when the market price was $12. Rick held the shares for a little more than a year after vesting and sold them when the market price was $15. Assuming that Rick made an election under section 83(b) when the stock was granted and that his marginal tax rate is 30 percent, what is the amount of Rick's income inclusion and tax liability upon the sale of the stock?

Accepted Answer

The answer of Rick recently received 500 shares of restricted...

Question 18

Annika's employer provides each employee with up to $200 of monthly vouchers for publictransportation. What is the amount that Annika must include into income with respect to her benefit in 2017?

Accepted Answer

The answer of Annika's employer provides each employee with up...

Question 19

Suzanne received 20 ISOs (each option gives her the right to purchase 20 shares of stock for $12 per share) at the time she started working when the stock price was $13 per share. Three years later, when the share price was $23 per share, she exercised all of her options. If Suzanne holds the shares for two additional years and sells them when the market price is $30, how much gain will Suzanne recognize on the sale and how much tax will she pay assuming her marginal tax rate is 39.6 percent?

Accepted Answer

The answer of Suzanne received 20 ISOs (each option gives...

Question 20

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,000 per year) for her so that she can receive her MBA. How much of the $8,000 tuition benefit does Brandy need to include in her income?

Accepted Answer

The answer of Brandy graduated from Vanderbilt with her bachelor's...

Quiz 12: Compensation

Annika's employer provides only its executives with parking benefits. The fair market value of the annual parking benefit is $4,800 ($400 per month). What is the amount Annika must include into income with respect to her parking benefit in 2017?

Kimberly's employer provides her with a personal travel allowance of $10,000 annually. Her marginal tax rate is 30 percent. Her employer has a marginal tax rate of 35 percent. What is Kimberly's after-tax benefit, ignoring payroll taxes?

Jane is an employee of Rohrs Golf Emporium. The shop allows employees to purchase equipment at significant discount. This year Jane purchased several new items to improve her game. If the employer's average gross profit percentage is 30 percent, what amount must Jane include in income?

Annika's employer provides each employee with up to $200 of monthly vouchers for publictransportation. What is the amount that Annika must include into income with respect to her benefit in 2017?

Brandy graduated from Vanderbilt with her bachelor's degree recently. She works for Walton & Company CPAs. The firm pays her tuition ($8,000 per year) for her so that she can receive her MBA. How much of the $8,000 tuition benefit does Brandy need to include in her income?