McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 60

Terry was ill for three months and missed work during this period.During his illness Terry received $4,500 in sick pay from a disability insurance policy.What amounts are included in Terry's gross income under the following independent circumstances?
a.Terry has disability insurance provided by his employer as a nontaxable fringe benefit.Terry's employer paid $2,800 in disability premiums for Terry this year.b.Terry paid $2,800 in premiums for his disability insurance this year.c.Terry's employer paid the $2,800 in premiums for Terry, but Terry elected to have his employer include the $2,800 as compensation on Terry's W-2.d.Terry has disability insurance whose cost is shared with his employer.Terry's employer paid $1,800 in disability premiums for Terry this year as a nontaxable fringe benefit, and Terry paid the remaining $1,000 of premiums from his after-tax salary.