McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 9

For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer:
a.Phil won $500 in the scratch-off state lottery.There is no state income tax.b.Ted won a compact car worth $17,000 in a TV game show.Ted plans to sell the car next year.c.Al Bore won the Nobel Peace Prize of $500,000 this year.Rather than take the prize, Al designated that the entire award should go to Weatherhead Charity, a tax-exempt organization.d.Jerry was awarded $2,500 from his employer, Acme Toons, when he was selected most handsome employee for Valentine's Day this year.e.Ellen won a $1,000 cash prize in a school essay contest.The school is a tax-exempt entity, and Ellen plans to use the funds to pay her college education.f.Gene won $400 in the office March Madness pool.