Question

please explain the answers

Other Income For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer: a. Phil won $500 in the scratch-off state lottery. Ted won a compact car worth $17,000 in a TV game show. Ted plans to sell the car next year. b. 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. c. d. Jerry was awarded $2,500 from his employer, Acme Toons, when he was selected most handsome employee for Valentine's Day this year 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. e. f. Gene won $400 in the office March Madness pool.

Answer 1