Latka Novatny gave you the following information to use in the preparation of his current year's tax return:
$\begin{array}{ll}
\text { Salary } & \$ 120,000 \
\text { Dividends } & 20,000 \
\text { Itemized deductions } & 35,000
\end{array}$ In addition, he received $40,000 from a relative for whom he had worked previously. You have researched whether the $40,000 should be classified as a gift or compensation and are confident that substantial authority exists for classifying it as a gift. What tax compliance issues should you consider in deciding whether to report or exclude the $40,000?

Question

Latka Novatny gave you the following information to use in the preparation of his current year's tax return:
 $\begin{array}{ll}
\text { Salary } & \$ 120,000 \
\text { Dividends } & 20,000 \
\text { Itemized deductions } & 35,000
\end{array}$ In addition, he received $40,000 from a relative for whom he had worked previously. You have researched whether the $40,000 should be classified as a gift or compensation and are confident that substantial authority exists for classifying it as a gift. What tax compliance issues should you consider in deciding whether to report or exclude the $40,000?

Quizplus · Accepted Answer

The Answer of Latka Novatny gave you the following information to use in the preparation of his current year's tax return:
 $\begin{array}{ll}
\text { Salary } & \$ 120,000 \
\text { Dividends } & 20,000 \
\text { Itemized deductions } & 35,000
\end{array}$ In addition, he received $40,000 from a relative for whom he had worked previously. You have researched whether the $40,000 should be classified as a gift or compensation and are confident that substantial authority exists for classifying it as a gift. What tax compliance issues should you consider in deciding whether to report or exclude the $40,000?

Latka Novatny Gave You the Following Information to Use in the Preparation