Geoff purchased a life annuity for $4,800 that will provide him $100 monthly payments for as long as he lives. Based on IRS tables, Geoff’s life expectancy is 240 months. How much of the first $100 payment will George include in his gross income?

Bonnie and Howard got divorced in 2018. Under the terms of the decree Bonnie will pay Howard $100,000 in cash in each of the next ten years (or until Howard’s death or remarriage). In addition, Bonnie pays $30,000 per year to support their daughter, Kristina, until she turns 19 years old. What amount (if any) is included in Howard’s gross income this year?

This year Bill purchased 1,000 shares of Cain common stock for $12 per share. At year-end the Cain shares were worth $32 per share. What amount must Bill include in income this year?

This year, Karl had the following capital gains (losses) from the sale of his investments: $6,000 LTCG, $30,000 STCG, ($12,000) LTCL, and ($18,000) STCL. What is the amount and nature of Karl’s capital gains and losses?

Identify the rule that determines whether a taxpayer must include in income a refund of an amount deducted in a previous year:

Larry received $4,250 from disability insurance that he purchased earlier this year from an insurance provider. Larry is allowed to exclude the $4,250 from his gross income.

Generally, a portion of each payment from a purchased annuity represents a return of capital.

Identify the rule that determine whether a married taxpayer must recognize income earned by their spouse:

The capital gains (losses) netting process for taxpayers without 25 or 28 percent capital gains requires them to (1) net short-term gains and losses, (2) net long-term gains and losses, and (3) net the outcome of steps (1) and (2) if they are of similar sign.

Worker’s compensation benefits received from a state-sponsored workers’ compensation plan are taxable.

Shelly is a student who has received an academic scholarship to the University. The scholarship paid $4,000 for tuition, $500 for fees, and $400 for books. What amount must Shelly include in her gross income?

Gross income includes all realized income that is recognized during the year.

A taxpayer who receives money when taking out a bank loan will include the amount borrowed in their gross income under the all-inclusive definition of income.

The cash method of accounting requires taxpayers to recognize income when they receive it in the form of cash, property, or services.

Dave and Jane file a joint return. They sell a capital asset at a $140,000 loss. Even though they have no capital gains, $3,000 of the loss can still be deducted in the current year if they have at least $3,000 of ordinary income.