During 2013/2014 Abel Sharma won $100,000 cash from a television quiz show. He a

Question

During 2013/2014 Abel Sharma won $100,000 cash from a television quiz show. He also received goods worth $10,000 from the television sponsors. In addition, he won a lotto draw of $15,000. He spent his lotto winnings on a boat. A small inheritance of $45,000 was received from his aunt. He runs a cleaning business with a sales revenue of $55,000 and expenses of $35,000 for the year. He goes wild boar hunting for recreation and has sold the excess meat to his relatives for $500.

Required: Advise Abel as to whether the above amounts are assessable or not. Justify your answer with the relevant tax sections, tax cases or reasons.

Explanation / Answer

Advise Abel as to whether the above amounts are assessable or not. Justify your answer with the relevant tax sections, tax cases or reasons.

The cash value of prizes or awards won in a drawing, quiz show program, beauty contest, or other event, must be included on the tax return as taxable income.
Must be reported as other income on Form 1040, Line 21 as per Publication 525.

Assessable or not with reasons Sharma won $100,000 cash from a television quiz show

The cash value of prizes or awards won in a drawing, quiz show program, beauty contest, or other event, must be included on the tax return as taxable income.
Must be reported as other income on Form 1040, Line 21 as per Publication 525.

Received goods worth $10,000 from the television sponsors Same as above but he need to report the fair market value of products won as a prize or award, as taxable income. he won a lotto draw of $15,000 and He spent his lotto winnings on a boat. Gambling income includes, among other things, winnings from lotteries, raffles, horse races, poker tournaments and casinos.
The above winnings also includes cash winnings as well as the fair market value of prizes such as cars and trips.
here, the trips also included. A small inheritance of $45,000 was received from his aunt Only a some states (Iowa, Kentucky, Maryland, Nebraska, New Jersey, Pennsylvania and Tennessee) have some kind of inheritance tax. For orther states its not taxable. He runs a cleaning business with a sales revenue of $55,000 and expenses of $35,000 for the year the income =55,000 - 35,000 = $20,000 is taxable as Self-Employment Income (business income). wild boar hunting for recreation and has sold the excess meat to his relatives for $500. the amount is taxable. it comes under Agriculture, forestry, hunting and fishing under schedule C of irs

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.