Certain items of sick pay an employee receives can be taxabl

Certain item\'s of sick pay an employee receives can be taxable. Which one of the following statements is incorrect in this regard? 71. a. Sick pay you receive from your employer is taxable. b. Sick pay you receive from an insurance company policy paid by your employer is taxable. c. Sik pay you receive from an insurance company policy paid by you d. Sick pay received from a welfare fund is taxable. is taxable. 72. ABC Company granted Joe, an employee, a stock appreciation right to 100 shares. The fair market value on the date the right was granted was $4 per share Joe later exercised the right when the stock was $16 per share. What amount must Joe include in income in the year he exercised the right? a. $200 b. $400 c. $800 d. $1,200 Your employer pays the premiums on a $50,000 group-term life policy for you. The premium is $5.00 per $1,000 coverage for a total of $300 per year. Which one of the following statements is correct in this regard? 73. a. The entire $300 premium must be included in your gross income. b. $150 must be included in your gross income. c. $50 must be included in your gross income. d. You are not required to include any amount in gross income. 74. Meals and lodging furnished by your employer are not required to be included in your income if certain conditions are met. Which one of the following statements is correct in this regard? a. b. c. d. Both meals and lodging must be furnished as a condition of your employment The meals, but not the lodging must be furnished as a condition of your employment. Both meals and lodging must be furnished for the convenience of your employer The meals do not have to be furnished on the employer\'s business premises 16

Solution

Question-71 - Answer is (d.) Sick pay you receive from a welfare fund.

Actually option a, b and c is incorrect, so as per definition option-b is wrong which says that If an employee\'s sick pay insurance is paid completely by either the employer or employee, then the entire amount of sick pay is taxable.

Question-72 - Answer is (d.) is $1200

Income from stock appreciation right is calculated as difference between fair market value on the date of exercise and fair market value on the date of grant which is as per question = 100shares * (16-4) = 100*12 = $1200, so answer (d) is right.

Question-73 - Answer is (d.) You are not required to include any amount in gross income

As per the federal income tax guidelines the premium cost for the first $50,000 of life insurance coverage provided under an employer-provided group term life insurance plan does not have to be reported as income and is not taxed to you. So as per the question employer paid for $50,000 which is within the limit entire amount is not taxable option (d) is correct answer.

Question-74 - Answer is (c) Both Meals and lodging must be furnished for the convenience of your employer

The above answer (c) is correct because as per the federal law for exemption of meals and lodging the following condition are to be satisfied, since option c is common for both things.