close search
Hit Return to see all results

What are some examples of such exclusions in gross income?


What are some examples of such exclusions in gross income?

Step 1

Gross Income:


For individual:


Gross income includes the income of an individual in the form of wages, salary, pension, alimony, interest, dividend or rental income. In order to calculate income tax, there are various exclusions from gross income.

Step 2

For individual:


Examples of exclusions from gross income:


  • Interest on state and municipal bonds.
  • Social security benefit.
  • Gifts and inheritances
  • Life insurance proceeds
  • Scholarships etc.
Step 3
  • Interest on state and municipal bonds: It is known as tax-exempt interest which provided by some states for federal income tax.
  • Social security benefit: Certain amount of some Social security benefit is excluded from gross income which will vary year to year.
  • Gifts and inheritances must not be received from employee and must have donative intent, thus it comes under excl...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Our solutions are written by experts, many with advanced degrees, and available 24/7

See Solution
Tagged in




Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add

Q: Depreciation calculation methods Gandolfi Construction Co. purchased a used CAT 336DL earth mover at...

A: The depreciation under straight line method is computed by following formula (cost-salvage value)/es...


Q: The following information was drawn from the Year 5 balance sheets of two companies:  Company Ass...

A: Return on equity ratio:  Rate of return on equity ratio is used to determine the relationship betwee...


Q: I don't understand this question either.   Flowers Inc.  has both common and preferred stock.  There...

A: When a company has non-cumulative preferential stock, it means that whenever a company distributes d...


Q: Cost flow assumptions-FIFO AND LIFO using a periodic system  the beginning inventory was 600 units a...

A: FIFO or the First In First Out is the inventory valuation method in which the oldest inventory is di...


Q: A 25-year annuity was purchased with $225,000 that had accumulated in a RRSP.  The annuity provides ...

A: DefinitionRRSP:  A Registered Retirement Saving Plan is an investment cum retirement saving plan for...


Q: Exercise 15-1During its first year of operations, Indigo Corporation had the following transactions ...

A: (a) Preparation of the journal entries for these transactions, assuming that the common stock has a ...


Q: The adjusted basis of an asset is the original cost (or basis) plus capital recoveries less capital ...

A: Adjusted basis: The amount of original cost, plus additional investments (capital expenditure) and r...


Q: Regarding the statue of limitations on additional assessments of tax by the IRS, determine the appli...

A: The statue of limitations to the IRS in accessing the taxes gets expired from three years from the d...


Q: Cost Relationships The following costs are for Optical View Inc., a contact lens manufacturer:   Req...

A: Total Cost of production includes both fixed cost and variable costs. Variable costs are those which...

Sorry about that. What wasn’t helpful?