In short
Prizes and awards, such as contest winnings or a car won in a raffle, are included in gross income at their fair market value.
Key takeaways
- Employee achievement awards of tangible property for length of service or safety are excluded within limits.
- Awards for religious, charitable or scientific achievement are excluded if the recipient didn't enter a contest and the award goes directly to charity.
- Scholarships follow their own rules.
Where it's tested
REG: Individual Taxation: Gross Income — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which of the following items is included in a taxpayer's federal gross income?