Question
(3) Refer to the Prizes and Awards discussion in section 3-3c, and to the posted Simmons case. Your favorite hobby is fishing. Last week you
(3) Refer to the Prizes and Awards discussion in section 3-3c, and to the posted Simmons case.
Your favorite hobby is fishing. Last week you entered a fishing contest, caught the biggest fish, and Wow! won the $25,000 grand prize.
But youre also a partner in a Big 4 accounting firm and make $400,000 a year, so another $25,000? . . . you contribute more than that to charity every year. So you tell the contest sponsor Thanks but no thanks and ask that the money be donated directly to the American Red Cross. Thats exactly what happens.
Do you need to include the $25,000 in your 2020 gross income? Why or why not?
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