Question

Q1. Jena is a full-time undergraduate student at State University and is claimed by her parents as a dependent. Her only source of income is a $10,000 athletic scholarship ($1,000 for books, $5,500 tuition, $500 student activity fee, and $3,000 room and board). What's Jena's gross income for the year? Please explain. Q2. Christie sued her former employer for a back injury she suffered on the job in 2016. As a result of the injury, she was partially disabled. In 2017, she received $240,000 for her loss of future income, $160,000 in punitive damages because of the employer's flagrant disregard for the employee's safety, and S15,000 for the reimbursement of medical expenses. What's Christie's gross income in 2016? Please explain. Q3. Meg received $20,000 from her father as a wedding gift. She also received $5,000 from her company as a gift of Annual Best Employee. What's Meg's gross income for this year? Please explain.

Answer 1

Answer to question 1

Gross total income will be zero

as scholarship recived is not taxable as will not be a part of taxable income

Answer to question no.-2

Gross total in come will be $ 400000

As Loss of future income is taxable -$240000

Punitive damage is also taxable under income from other sources-$160000

Medical reimbursement is exempt upto $15000 so it will not be a part of taxable income

Hence gross total income is ($240000+$160000)= $400000

Answer to question no.3

Gross total income will be $ 5000

As bonus received will be taxable & Anygift received on ocassion of marriage will not be taxable received from any person

hence gross total income will be $ 5000