Teresa won $9,000 playing the Illinois lottery. Which of the following statements is/are correct?
I.Teresa must include the $9,000 in gross income.
II.The All-inclusive Income Concept applies to this situation.
III.Legislative Grace allows Teresa to exclude lottery winnings from recognition.

A)Only statement I is correct.
B)Only statement II is correct.
C)Only statement III is correct.
D)Only statements I and II are correct.
E)Statements I, II, and III are correct.

Question

Teresa won $9,000 playing the Illinois lottery. Which of the following statements is/are correct?
I.Teresa must include the $9,000 in gross income.
II.The All-inclusive Income Concept applies to this situation.
III.Legislative Grace allows Teresa to exclude lottery winnings from recognition.
​
A)Only statement I is correct.
B)Only statement II is correct.
C)Only statement III is correct.
D)Only statements I and II are correct.
E)Statements I, II, and III are correct.

Quizplus · Accepted Answer

I. Lottery winnings are considered taxable income by the IRS and must be included in gross income. II. The All-inclusive Income Concept suggests that all income from whatever source derived is taxable unless specifically excluded by law. III. Legislative Grace, which allows certain income to be excluded from taxation, does not apply to lottery winnings; they are not exempt from being taxed.

Teresa Won $9,000 Playing the Illinois Lottery