Requirement For each of the following, indicate whether the amount is taxable: a

Question

Requirement

For each of the following, indicate whether the amount is taxable:

a.

Peggy won $4,000 in the state lottery.

b.

Jane won a $500 prize for her entry in a poetry contest.

c.

Linda was awarded $2,000 when she was selected as "Teacher of the Year" by the local school district.

Are the above 3 includable in gross income? Answer Yes or No for each.

a.

Peggy won $4,000 in the state lottery.

b.

Jane won a $500 prize for her entry in a poetry contest.

c.

Linda was awarded $2,000 when she was selected as "Teacher of the Year" by the local school district.

Are the above 3 includable in gross income? Answer Yes or No for each.

Explanation / Answer

a. Peggy won $4,000 in the state lottery. i. Taxable Yes

b. Jane won a $500 prize for her entry in a poetry contest. i. Taxable Yes

c. Linda was awarded $2,000 when she was selected as “Teacher of the Year” by the local school district. i. Taxable Yes, but could be excluded if the receipt of the award is not conditioned on substantial future services and the amount is paid by the school to a tax-exempt organization of Linda's choice.

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