Question

Requirement For each of the following items, indicate whether the individual taxpayer must include any amount in gross income. a. Employees of Eastside Bookstore are given their birthdays off with pay. b. Westside Hardware, Inc., gave each employee 10 shares of Westside stock worth $100 per share in lieu of a cash bonus. Employees of Northside Manufacturing were allowed to take home the company's old computers when the company purchased new ones. (Assume the computers have some monetary value.) ن Transactions Includable in gross income? a. Employees of Eastide Bookstore are given their birthdays off with pay. Westside Hardware, Inc., gave each employee 10 shares of Westide stock worth b. $100 per share in lieu of a cash bonus. Employees of Northside Manufacturing were allowed to take home the C. company's old computers when the company purchased new ones.

Answer 1

Answer Includable in gross income? Includable Transactions Employees of Eastside Bookstore are given their birthdays off with pay. Westside Hardware, Inc. gave each employee 10 shares of Westide stock worth $ 100 per share in lieu of a cash bonus Employees of Northside manufacturing were allowed to take home the company's old computers when the company purchased new ones Includable Includable a) Explanations/Reasons Paid holidays are taxable, Paid holiday includes off given to employees on birthdays Therefore, birthday off with pay is taxable and includable in gross income' b) Economic benefits are taxable, Economic benefits includes stock issued to employees. therefore, stock issued is taxable and includable in gross income. Value of share is 100*10=1000 Compensation is taxable, compensation includes allowance to employees in the form of old computer. therefore, allowance to employees in the form of old computer is taxable and includable in gross income Note: If the company fully depreciated the computer and computer has no fair market value, then it is not taxable. But in question it specifically mention that computer has some monetary value. Therefore taxable