Problem I
Noncash Compensation. For each of the following items, indicate whether the individual taxpayer must include any amount in gross income.
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Employees of Eastside bookstore are given their birthdays off with pay.
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Westside Hardware, Inc., gave each employee 10 shares of Westside stock worth $ 100 per share in lieu of cash bonus.
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Employees of Northside Manufacturing were allowed to take home the company’s old computers when the company purchased new ones.
Comprehensive problem
Problem II
During 2013, Gary earned $ 57,000 as an executive, Gary, who is single, supported his half-sister, who lives in a nursing home. Gary received the following interest: $ 400 on City of Los Angeles bonds, $ 200 on a money market account, and $ 2,100 on a loan made to his brother.
Gary spent one week serving on a jury and received $50.
Gary received a refund of federal income taxes withheld during the prior year of $ 1,200 and state income taxes refund of $ 140. Gary had itemized deductions last year of $8,000 which included $ 1,000 of state income taxes.
Gary received qualified dividends from Ace Corporation of $1,000 and from Tray Corporation of $ 1,400. Gary itemized deductions equal $9,000, and withholding for federal income taxes is $8,000. Compute Gary’s tax due refund due 2013.
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