For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer: a. Tabitha won $1500 in the scratch-off state lottery. There is no state income tax. b. Matt won a compact car worth $20,000 in a TV game show. Matt plans to sell the car next year. c. Milton Boyes won the Nobel Peace Prize of $500,000 this year. Rather than take the prize, Milton designated that the entire award should go to Spearhead Charity, a tax-exempt organization.

For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer: a. Tabitha won $1500 in the scratch-off state lottery. There is no state income tax. b. Matt won a compact car worth $20,000 in a TV game show. Matt plans to sell the car next year. c. Milton Boyes won the Nobel Peace Prize of $500,000 this year. Rather than take the prize, Milton designated that the entire award should go to Spearhead Charity, a tax-exempt organization.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter3: Business Income And Expenses

Section: Chapter Questions

Problem 15MCQ

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In each of the following problems, identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify. Thans grandmother dies and leaves him jewelry worth 40,000. In addition, he is the beneficiary of a 100,000 life insurance policy that his grandmother had bought before she retired.
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