Income - Gross Income - Exclusions

Question 1

What is the treatment of life insurance proceeds?

Answer 1

Proceeds of life insurance received due to the death of the insured are excluded from income.

Question 2

Are prizes and awards subject to taxation?

Answer 2

Generally taxed.

Question 3

Are scholarships taxable?

Answer 3

1. Generally excluded up to amount of tuition and expenses;

2. No services can be required;

Question 4

What is the tax treatment of gifts?

Answer 4

1. Gifts are excluded from income;

2. Income accrued up to date of gift is taxable to donor; after, to donee.