Question

Herbert was employed for the first six months of 2020 and earned $90,000 in salary. During the next six months, he collected $8,800 of unemployment compensation, borrowed $12,000 (using his personal residence as collateral), and withdrew $2,000 from his savings account (including $60 of interest). He received dividends of $550. His luck was not all bad; in December, he won $1,500 in the lottery on a $5 ticket.

Indicate how much (if any) of each item is included in Herbert's gross income.


Item Amount Included in Gross Income
Salary $
Unemployment compensation
Loan proceeds
Savings account withdrawal (including interest)
Dividend income
Lottery winnings
Gross income

Answer 1

Answer:

the gross income is $100,910

Explanation:

The computation is shown below:

Salary $90,000

Unemployment compensation $8,800

Loan proceeds $0

Savings account withdrawal $60

Dividend income $550

Lottery winnings $1,500

Gross income $100,910

Hence, the gross income is $100,910