Jensen reported the following items during the current year: Fair rent value of a condominium owned by Jensen’s employer $1,400.

Jensen reported the following items during the current year:

Fair rent value of a condominium owned by Jensen’s employer $1,400.
Cash found in a desk purchased for $30 at a flea market 400
Inheritance 11,000
The employer allowed Jensen to use the condominium for free in recognition of outstanding achievement. Based on this information, what is Jensen’s gross income for the year?

$ 1,400
$ 1,770
$ 1,800
$12,400

ANSWER:  $ 1,800

**The fair value of the condominium is included in income since this was received in return for services rendered to her employer. The $400 cash is also included in income under the treasure trove principle. The $400 is not offset by the $30 used to purchase the desk, but she does have a basis of $30 for the desk. Inheritances are never included in gross income.

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