Question

Bernie is a former executive who is retired. This year Bernie received $250,000 in pension payments and $10,000 of social security payments. What amount must Bernie include in his gross income?
A.$255,000
B.$258,500
C.Zero
D.$250,000
E.$260,000

Answer 1

Answer:

The correct option is B

Explanation:

The gross income of Bernie would be

Individuals include only 85% of the social security benefits in their gross income

So,

= $10,000 × 85%

= $8,500

Gross Income = Pension Payment + Social Security payment

                        = $250,000 + $8,500

                        = $258,500

Therefore, the amount of $258,500 would be the gross income of Bernie.