Question

Which one of the following would not be included in Bob's gross income?

1) Salary from his job
2) Dividend income from stocks
3) Gift from a friend
4) Interest earned from a savings account

Answer 1

A gift from a friend would not be included in Bob's gross income as per the guidelines of the IRS, which typically excludes personal gifts.

Step-by-step explanation:

The item from the list that would not be included in Bob's gross income is a gift from a friend. According to the Internal Revenue Service (IRS), gross income includes all income from whatever source derived, which encompasses the salary from his job, dividend income from stocks, and interest earned from a savings account. However, gifts from friends or family members are typically excluded from gross income for tax purposes, provided they fall within certain exemptions and are not in payment for services rendered or as part of a business transaction.