Income Tax - EXCLUSIONS from Gross Income

Question 1

Our basic mnemonic for exclusions:

Answer 1

MRT GI PreINSU QO

• Miscellaneous
• Retirement, pensions, other benefits QUALIFIED
• Treaty-exempt
• Gifts, bequests, devises
• Injuries
• PREmiums returned*
• INSUrance Proceeds***
• Qualified PERA
• Other exempt income: BMBE, MWE, COOP, Nonstocknonprofits, Qualified Employee Trust Fund’s Income

Question 2

Rules on life insurance proceeds:

Answer 2

• On a policy by the company on its employee:
• Irrevocable beneficiary:
• Beneficiary is the estate / administrator:
• Beneficiary is the heirs