Lin received a lump-sum payment of $10,000. The payment is for social security b

Question

Lin received a lump-sum payment of $10,000. The payment is for social security benefits that were due her in 1991 ($7000) and 1992 ($3000). For the current year, she has a marginal tax rate of 30% and 85% of all social security benefits are included in gross income. In 1991 and 1990 to 50% of all social security benefit more included in gross income. What is the least amount of the lump-sum payment that Lin can include in this year's gross income if she does not have and cannot obtain any of her past tax forms?

A) $0
B) $5,000
C) $8,500
D) $10,000

Explanation / Answer

In the case of non availability of past tax forms the minimum income to be included in gross total income regarding social security benefit is according to the current percentage that applicable now.

Swing the given case the minimum amount to be included in gross total income is 85% of the amount towards social security benefits received.

C)10000*85%=8500

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