Consider the following letter and answer Shady's question. To my friendly student tax preparer: Hello, my name is Shady Slim. I understand you are going to help me figure out my gross income for the year...whatever that means. It's been a busy year and I'm a busy man, so let me give you the lowdown on my life and you can do your thing. I was unemployed at the beginning of the year and got $2,000 in unemployment compensation. I later got a job as a manager for Roca Cola. I earned $57,250 in base salary this year. My boss gave me a $5,900 Christmas bonus check on December 22. I decided to hold on to that check and not cash it until next year, so I won't have to pay taxes on it this year. Pretty smart, huh? My job's pretty cool. I get a lot of fringe benefits like a membership to the gym that costs $445 a year and all the Roca Cola I can drink, although I can't really drink a whole lot-I figure $40 worth this year. As part of my manager duties, I get to decide on certain things like contracts for the company. My good buddy, Eddie, runs a bottling company. I made sure that he won the bottling contract for Roca Cola for this year (even though his contract wasn't quite the best). Eddie bought me a Corvette this year for being such a good friend. The Corvette cost $59,000, and I'm sure he bought it for me out of the goodness of his heart. What a great guy! Here's a bit of good luck for the year. Upon leaving my office one day, I found $8,450 lying in the street! Well, one person's bad luck is my good luck, right? I like to gamble a lot. I won a $28,350 poker tournament in Las Vegas this year. I also won about $5,180 over the year playing the guys at our Friday night poker game. Can you believe that I didn't lose anything this year? Speaking of the guys, one of them hit me with his car as we were leaving the game one night. He must have been pretty ticked that he lost! I broke my right leg and my left arm. I sued the guy and got $12,800 for my medical expenses and $3,450 to pay my psychotherapist for the emotional problems I had relating to the injuries (I got really depressed!), and I won $12,900 in punitive damages. That'll teach him that he's not so tough without his car! Another bit of bad luck. My uncle Monty died this year. I really liked the guy, but the $245,000 inherkance I received from him made me feel a little better about the loss. I did the smart thing with the money and invested it in stocks and bonds and socked a little into my savings account. As a result, I received $645 in dividends from the stock. $245 in interest from the municipal bonds, and $345 in interest from my savings account.