Final answer:
Tax-exempt interest income and scholarships for qualified education expenses should be included in gross income. Gifts received from family members and inheritances from deceased relatives should not be included in gross income.
Step-by-step explanation:
The payments to a taxpayer that should be included in gross income are:
- Tax-exempt interest income: Tax-exempt interest income refers to the interest that is earned on certain investments that are not subject to federal income tax. Even though it may be considered tax-exempt, it is still counted as part of gross income.
- Scholarships for qualified education expenses: Scholarships that are used to pay for qualified education expenses, such as tuition and textbooks, are generally included in gross income. However, there are certain scholarships that may be excluded from gross income if they meet certain criteria.
The payments that should not be included in gross income are:
- Gift received from a family member: Gifts received from family members are generally not included in gross income. The person giving the gift may be subject to gift tax, but the recipient does not need to report the gift as income.
- Inheritance from a deceased relative: Inheritances received from a deceased relative are not included in gross income. The estate may be subject to estate tax, but the recipient does not need to report the inheritance as income.