Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of benefits is as follows: Benefit Cost Health insurance—single $ 5,000

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 39P
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Matt works for Fresh Corporation. Fresh offers a cafeteria plan that allows each employee to receive $15,000 worth of benefits each year. The menu of benefits is as follows:

Benefit Cost
Health insurance—single $ 5,000
Health insurance—with spouse    $ 8,000
Health insurance—with spouse and dependents     $ 11,000
Dental and vision       $ 1,500
Dependent care—any specified amount up to $5,000        Variable
Adoption benefits—any specified amount up to $5,000     Variable
Cash—any specified amount up to $15,000 plan benefit    Variable
401(k)—any specified amount up to $10,000       Variable

For each of the following independent circumstances, determine the amount of income Matt must recognize and the amount of deduction Fresh may claim: (Leave no answer blank. Enter zero if applicable.)

Problem 12-49 Part b (Static)

a) Matt elects the single health insurance benefit and places 10,000 dollars in his 401K
b) Matt selects the single health insurance benefit, is reimbursed $5,000 for dependent care, and takes the remainder in cash.

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