Problem NO: 56

For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer:\na.       Phil

For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer:

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a.       Phil won $500 in the scratch-off state lottery.  There is no state income tax.

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b.       Ted won a compact car worth $17,000 in a TV game show.  Ted plans to sell the car next year.

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c.       Al Bore won the Nobel Peace Prize of $500,000 this year.  Rather than take the prize, Al designated that the entire award should go to Weatherhead Charity, a tax-exempt organization.

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d.       Jerry was awarded $2,500 from his employer, Acme Toons, when he was selected most handsome employee for Valentine’s Day this year.

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e.       Ellen won a $1,000 cash prize in a school essay contest.  The school is a tax-exempt entity, and Ellen plans to use the funds to pay her college education.

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f.       Gene won $400 in the office March Madness pool. 

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