Question

In addition to her salary, Emily received the following amounts during the current year: Life insurance proceeds where she was the beneficiary $75,000 Qualifying dividend on corporate stock 5,000 Income from babysitting 300 Gift card from a drawing for filling out a survey at a local store 500 Gambling winnings from betting on the Kentucky Derby Gambling losses from a weekend in Las Vegas 1,000 600 By how much will these items increase her gross income? $6,300 $81,800 $6,200 $6,800 $81,300 $81,200

Answer 1

1. If a benificiary recieves the death benifit under a life insurance policy they are not suppose pay any taxes on it

2. Qualifying dividend are included in the gross income

3. Income from babysitting are taxable and comes under gross income

4. Anything that is earned through surveys is taxable

5. Gambling winning is taxable as ordinary income

6. Gambling losses are deducteable as itemized deductions.

So her gross income will incrase by

Qualifying dividend 5000

+ Income from babysitting 300

+ Gift card for filling out a survey 500

+ Gambling winning 1000

- Gambling losses (600)

Total Income increase 6200

The correct answer will be $6200