James is a partner at a law firm. He also serves on the board of a nonprofit. The nonprofit in gratitude for his service gives James the following.

(a) Assume the nonprofit gives James $16,000. Would this be taxable income? Why?

(b) Assume the nonprofit gives James a car worth $37,000. Is this taxable income? Why?

(c) Assume that James writes the employee handbook for the nonprofit and in exchange the nonprofit pays him $16,000. Is this taxable income? Why?

(d) Assume the nonprofit offers James $25,000 of stock but instead he directs the nonprofit to grant the stock to his son. Is this taxable income and to whom? What basis would the recipient take?

Answer rating: 100% (QA)

a Yes the 16000 given to James would likely be considered taxable income Accordin... View the full answer