Question
36. Brain invented a new product but did not know who would be willing to market it. Brain asked her friend Rooster for some help.
36. Brain invented a new product but did not know who would be willing to market it. Brain asked her friend Rooster for some help. Rooster recommended someone who would be likely to market the product. The product turned out to be a success, and Brain was so happy that she went to Rooster and said, I want to make you a gift since you were so good to me. Brain gave Rooster $5,000. Which of the following statements is true?
A. Rooster must include the $5,000 in gross income.
B. Rooster may exclude the $5,000 as a gift.
C. Rooster may exclude the $5,000 as a prize.
D. Rooster must pay the gift tax on the $5,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started