LO.2 Does the taxpayer recognize gross income in the following situations?

a. Ava is a filing clerk at a large insurance company. She is permitted to leave the premises for her lunch, but she always eats in the company’s cafeteria because doing so is much less expensive than purchasing a comparable meal at a nearby restaurant. On average, she pays $3 for a lunch that would cost $8 at a restaurant. However, if the prices in the cafeteria were not so low and the food was not so delicious, she would probably bring her lunch at a cost of $2 per day.

b. Scott is a resident adviser (RA) in a college dormitory and is provided with lodging in the dormitory. He is not required to pay the $300 per month that a room costs other students. In addition, he is paid $100 per month.

c. Ira recently moved to accept a job. For the first month on the new job, Ira was searching for a home to purchase or rent. During this time, his employer permitted Ira to live in an apartment the company maintains for customers during the buying season. The month that Ira occupied the apartment was not during the buying season, however, and the apartment would not otherwise have been occupied.