Ben lost his job when his employer moved its plant. During 由eye矶he collected unemployment benefits for three months, a total of $1,800. While he was waiting to hear from prospective employers, he painted his hot1se. If Ben had paid someone else to paint his house, the cost would have been $3,000. The cost of the paint Ben used was $800. What is Ben's gross income for tax purposes from the above events?

Question

Russell Mendoza

Business

3 October, 10:42

Ben lost his job when his employer moved its plant. During 由eye矶he collected unemployment benefits for three months, a total of $1,800. While he was waiting to hear from prospective employers, he painted his hot1se. If Ben had paid someone else to paint his house, the cost would have been $3,000. The cost of the paint Ben used was $800. What is Ben's gross income for tax purposes from the above events?

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Answers (1)

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Jocelyn Fry · Answer 1

The answer is: Ben's gross income is $1,800

Explanation:

Ben should only recognize as revenue the $1,800 he received as unemployment benefits. Whatever money he saved form painting his house is not considered income, since no one paid him for doing it. Also the money he spent on paint for his house is not deductible either.