How much gross income does Ron have from the following items of economic income? • Received cash gift of $5,000 from parents.
• Received $12,000 in alimony payments and $6,000 in child support from former spouse.
• Won $4,000 in Indiana lottery scratch off game.
• Investment in IBM stock increased in value by $15,000.
• Collected $12,000 in unemployment benefits.
A) $16,000
B) $28,000
C) $33,000
D) $34,000
E) $54,000

Question

Quizplus · Accepted Answer

Gross income includes all income from whatever source derived, except certain specifically excluded items. The cash gift from Ron's parents is excluded from gross income. Alimony and child support payments are also excluded from gross income. Winnings from gambling are included in gross income. The increase in value of Ron's IBM stock is not included in gross income until he sells the stock. Unemployment benefits are included in gross income. Therefore, Ron's gross income is $12,000 (alimony) + $6,000 (child support) + $4,000 (lottery winnings) + $12,000 (unemployment benefits) = $28,000.

How Much Gross Income Does Ron Have from the Following