Hal Gore won a $1 million prize for special contributions to environmental research.This prize is awarded for public achievement, and Hal directed the awarding organization to transfer $400,000 of the award to the Environmental Protection Agency.How much of the prize should Hal include in his gross income?

Question

Quizplus · Accepted Answer

Hal should include $600,000 in his gross income. This is calculated by subtracting the amount directed to the Environmental Protection Agency ($400,000) from the total prize amount ($1 million). Prizes for public achievement are generally taxable and must be included in gross income.

Hal Gore Won a $1 Million Prize for Special Contributions