Gross Income

Question 1

What is gross income?

Answer 1

1. All income from whatever source derived,
   
   • including compensation for services (wages, fees, commissions, fringe beneifts, and similar items)
2. Gross income derived from business
3. Gains derived from dealing in property (amount realized on the sale, minus, tax payers basis)
4. Interest
5. Rents, royalties, and dividends, from property
6. Alimony & separate maintenance payments
7. Annuities, pension, and income from life insurance
8. Income from discharge of indebtedness
9. Interest from an interest in estate
10. Distributive share of partnership gross income
11. Income from illegal activities
12. Treasure Trove
13. Prizes and Awards
14. Uncharged Interest on Loans

Question 2

What qualifies as alimony?

Answer 2

1. A payment will qualify as alimony if:
   
   1. it is made in cash and is received by or on behalf of a spouse under a divorce or separation instrument;
   2. the divorce or separation instrument does not designate the payment as being something other than alimony;
   3. the payee and payor are not members of the same household at the time of payment;
2. Child support will not be treated as alimony or a separate maintenance payment.

Question 3

What prizes and aware are NOT gross income?

Answer 3

1. Qualified scholarships and fellowship grants under § 117 are not included in taxable income.
2. If the award recognizes past achievements of the recipient in the fields of religion, charity, science, education, art, literature, and civics and if the recipient assigns the prize or award to a tax-exempt charitable organization.