1- As an executive of Cherry, Inc., Ollie receives a fringe benefit in the form of annual tuition scholarships of $10,000 to each of his three children. The scholarships are paid by the company on behalf of the children of key employees directly to each childs educational institution and are payable only if the student maintains a B average.

a. The tuition payments of $30,000 may be excluded from Ollies gross income as a scholarship.

b. The tuition payments of $10,000 each must be included in each childs gross income.

c. The tuition payments of $30,000 may be excluded from Ollies gross income because the payments are for the academic achievements of the children.

d. The tuition payments of $30,000 must be included in Ollies gross income.

e. None of these.

2- Christie sued her former employer for a back injury she suffered on the job in 2019. As a result of the injury, she was partially disabled. In 2020, she received $240,000 for her loss of future income, $160,000 in punitive damages because of the employers flagrant disregard for the employees safety, and $15,000 for medical expenses. The medical expenses were deducted on her 2019 return, reducing her taxable income by $12,000. Christies 2020 gross income from the above is:

a. $415,000.

b. $412,000.

c. $255,000.

d. $175,000.

e. $172,000.

3- Randy is the manager of a motel. As a condition of his employment, Randy is required to live in a room on the premises so that he would be there in case of emergencies. Randy considered this a fringe benefit since he would otherwise be required to pay $800 per month rent. The room that Randy occupied normally rented for $70 per night, or $2,100 per month. On the average, 90% of the motel rooms were occupied. As a result of this rent free use of a room, Randy is required to include in gross income.

a. $0

b. $800 per month.

c. $2,100 per month.

d. $1,890 ($2,100 0.90).

e. None of these

Please answer all 3 questions. THANK YOU :)