Question

Sandy earned a salary of $50,000 last year. Her parents gave her a car valued at $23,000 for her birthday. In addition, she earned $1,200 in interest income on a savings account and inherited $75,000 from her grandmother's estate. What is the amount of Sandy's gross income?

Answer 1

Answer:

$51,200

Explanation:

Gross income computation includes all forms of income such as wages, rents, royalties, dividend etc. However, gifts and inheritances are not considered as a part of the gross income.

Therefore, Sandy's gross income consist of her salary, and the interest income

Sandy's Gross income = 50000 + 1200

                       = $51,200

The inheritance of her grandmother's estate and car gift are not included as a part of Sandy's gross income.