#1) Eddie is single and earned $10,000 from a paper route and $25,000 from selli

Question

#1)    Eddie is single and earned $10,000 from a paper route and $25,000 from selling real estate as long-term capital gains. Which of the following is true?

He owes FICA tax and income tax on the income from the paper route.
A)  He does not owe FICA tax as he made money with long-term capital gains.


B)  He owes FICA tax and income tax on the income from the real estate.


C)  He owes FICA tax on both amounts because both count as income.


D)  He owes income tax on the paper route and the real estate incomes.

Explanation / Answer

1) He owes FICA tax only through the income from paper route.

2)Annual salary ONLY.

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