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10 February, 01:26

Carey is a waiter at a restaurant that pays a small hourly amount plus tips. Customers are not required to tip the waiter. Carey is especially attentive and friendly, and her tips average 25% of the restaurant charges. Is Carey required to include any of her tips in gross income when the customer has no legal obligation to make the payment

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  1. 10 February, 01:30
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    Yes, she is required to include her tips in gross income.

    Explanation:

    Yes, Carey is required to include her tips in gross income. She is required to include both her small hourly amount and her tips, declaring both as a total sum amount. Even though the customer has no obligation to pay any tip of any kind to Carey, any tip she receives will count as compensation for services, as the tips are payments for her service to the customer.
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