Leo’s employer, NY Presbyterian Hospital, provides the following benefits: • Life insurance equal to one times an...

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Leo’s employer, NY Presbyterian Hospital, provides thefollowing benefits:
• Life insurance equal to one times an employee’s salary or$50,000 whichever is higher.
• Family health and accident insurance that costs the hospital$1500 per month.
• Payment of Leo’s medical license annual renewal fee of$500.
• A matching employer contribution of up to 6% into thehospital’s qualified pension plan. Leo contributes 6% of his salaryto the pension plan through salary deduction.
• The hospital provides a free meal in the hospital cafeteriafor all employees who work a shift in excess of eight hours. Thevalue of the free meals that Leo received during the year was$1,200.
• The hospital provides parking for the physicians at thehospital’s parking garage. The fee for parking is $300 permonth.
Sadly, during the year Grace’s grandmother passed away leavingGrace $500,000 in cash and her summer home in the Hamptons valuedat $1.5 million. Grace was also the beneficiary of her grandmother‘s life insurance policy that had a $250,000 face value.
Grace invested the $500,000 inheritance in NY/NJ PortAuthority municipal bonds. During the current year, she received$40,000 in interest from the bonds.
While coming out of surgery late one night at the hospital,Leo slipped on a puddle of water on the floor, fell down the stairsand was knocked unconscious. He was unable to work while he wasrecovering from his injuries that included a massive concussion andmultiple lacerations requiring stitches. The hospital’s workers’compensation policy paid him $25,000. The hospital also paid him anadditional $10,000 during his recovery to compensate him for lostincome. His medical costs due to his injuries totaled $3,000 ofwhich 80% were reimbursed by the hospital’s health and accidentpolicy.
Leo’s former classmate from Johns Hopkins, Jack, is aphysician at Newark General. Jack has always been envious of Leo’ssuccess and the two have been rivals since their medical schooldays. Jack “leaks” information to the NY Daily News that Leo has adrinking problem and implies that he may have been intoxicated thatnight and performed surgery while under the influence. Scandalensues and Leo sues the NY Daily News for libel. He is awarded$500,000 in damages to his professional reputation.
Required:
1) Assess each situation and determine if it results intaxable income and how much. If you determine the income qualifiesas an exclusion, then why?
2) Update Leo and Grace’s total income and AGI for any of theabove.

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we offer a competitive benefit package to our employees Core benefits include medical dental basic group life insurance short and longterm disability accidental death and dismemberment coverage and supplemental life See Answer

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Leo’s employer, NY Presbyterian Hospital, provides thefollowing benefits:• Life insurance equal to one times an employee’s salary or$50,000 whichever is higher.• Family health and accident insurance that costs the hospital$1500 per month.• Payment of Leo’s medical license annual renewal fee of$500.• A matching employer contribution of up to 6% into thehospital’s qualified pension plan. Leo contributes 6% of his salaryto the pension plan through salary deduction.• The hospital provides a free meal in the hospital cafeteriafor all employees who work a shift in excess of eight hours. Thevalue of the free meals that Leo received during the year was$1,200.• The hospital provides parking for the physicians at thehospital’s parking garage. The fee for parking is $300 permonth.Sadly, during the year Grace’s grandmother passed away leavingGrace $500,000 in cash and her summer home in the Hamptons valuedat $1.5 million. Grace was also the beneficiary of her grandmother‘s life insurance policy that had a $250,000 face value.Grace invested the $500,000 inheritance in NY/NJ PortAuthority municipal bonds. During the current year, she received$40,000 in interest from the bonds.While coming out of surgery late one night at the hospital,Leo slipped on a puddle of water on the floor, fell down the stairsand was knocked unconscious. He was unable to work while he wasrecovering from his injuries that included a massive concussion andmultiple lacerations requiring stitches. The hospital’s workers’compensation policy paid him $25,000. The hospital also paid him anadditional $10,000 during his recovery to compensate him for lostincome. His medical costs due to his injuries totaled $3,000 ofwhich 80% were reimbursed by the hospital’s health and accidentpolicy.Leo’s former classmate from Johns Hopkins, Jack, is aphysician at Newark General. Jack has always been envious of Leo’ssuccess and the two have been rivals since their medical schooldays. Jack “leaks” information to the NY Daily News that Leo has adrinking problem and implies that he may have been intoxicated thatnight and performed surgery while under the influence. Scandalensues and Leo sues the NY Daily News for libel. He is awarded$500,000 in damages to his professional reputation.Required:1) Assess each situation and determine if it results intaxable income and how much. If you determine the income qualifiesas an exclusion, then why?2) Update Leo and Grace’s total income and AGI for any of theabove.