Question

1. Fred Fumble won an automobile from Sports Illustrated for being the most valuable player in the Super Bowl game. Fred did not apply for the award, and Sports Illustrated did not require Fred to perform any future services. The suggested list price for the auto was $95,000, although Fred could have purchased an identical car for $85,000. What amount should be included in Fred’s gross income in regard to the auto?

1. $0
2. $85,000
3. $90,000
4. $95,000

2. Arthur, an employee of Dragonworld Corporation, received the following benefits from his employer during the year:

Salary $35,000

Vacation Pay $800

Christmas bonus $1200

$35,000 qualified group-life insurance $150

Thanksgiving turkey (value) $20

1. $35,000
2. $35,800
3. $37,000
4. $37,150
5. $37,170

Answer 1

b. 85000

The purchased car of 85000 is considered by the in Fred’s gross income in regard to the auto.

b. 35800

Salary $35,000

Vacation Pay $800

The rest of the cost or benefits not included