During the year,Cathy received the following: • Dividends of $4,000 from Lindsay Corporation.Cathy's father owned the stock and directed the corporation to send the dividends to Cathy.
• A car worth $30,000 for being the 100^th customer at a car dealership.
• $5,500 cash gift from her uncle.
• $10,000 inheritance from her grandmother.
What amount must Cathy include in gross income?

Question

Quizplus · Accepted Answer

Cathy must include the $30,000 value of the car in her gross income as it is a prize. The dividends are not included because they were directed by her father, and gifts and inheritances are generally not included in gross income.

During the Year,Cathy Received the Following: • Dividends of $4,000