Becker CPA Review 5-3

Linda is an employee of JRH Corporation. Which of the following would be included in Linda's gross income?

a.Premiums paid by JRH Corporation for a group term life insurance policy for $50,000 of coverage for Linda.

b.$1,000 of tuition paid by JRH Corporation to State University for Lindas masters degree program.

c.A $2,000 trip given to Linda by JRH Corporation for meeting sales goals.

d.$1,200 paid by JRH Corporation for an annual parking pass for Linda.

Tonya is a cash basis taxpayer. In 2020, she paid state income taxes of $8,000 and property taxes of $5,500. In early 2021, she filed her 2020 state income tax return and received a $900 refund.

a.If Tonya itemized her deductions in 2020 on her Federal income tax return and her itemized deductions exceeded the standard deduction by more than $900, she must recognize $900 income in 2021 under the tax benefit rule.

b.If Tonya itemized her deductions in 2020 on her Federal income tax return, the refund will not affect her 2021 tax return.

c.If Tonya itemized her deductions in 2020 on her Federal income tax return, she should amend her 2020 return and reduce her itemized deductions by $900.

d.If Tonya itemized her deductions in 2020 on her Federal income tax return, she must amend her 2020 Federal income tax return and use the standard deduction.