Question - Larry, age 32, works for Horizon Corporation. His annual salary is $60,000. Horizon provides the following benefits to all employees:
Group term life insurance (each employee is provided with $80,000 worth of coverage that costs Horizon $120 per employee)
Medical insurance (the cost of Larry's policy is $2,100)
Qualified pension plan (Horizon matches employee contributions up to $2,500. Larry contributes 7 percent of his salary to the plan.)
Qualified award program (Larry received a watch Horizon purchased for $100 to recognize his 5 years of service with Horizon.)
How much income must Larry recognize and how much can Horizon Corporation deduct in the current year?