Federal Tax Research 10th Edition by Roby Sawyers,William Raabe,Gerald Whittenburg,Steven Gill

Exercise 75

Candidate Feldman ran for Congress in 2010, raising $4.7 million for the campaign, including $800,000 in federal matching amounts. Five months after his opponent was sworn into office, auditors discovered that Feldman used $500,000 of campaign donations for a personal vacation, taken immediately after the unsuccessful campaign. What are the tax consequences of this use of election funds