.Gross income is defined as all income you receive in the form of money, goods, property, and services that isn't exempt from tax. It also includes income from sources outside the United States or from the sale of your main home (even if you can exclude all or part of it). (IRS 2015 Publication 17, pg. 4) Why do we exclude unrealized gains, such as the increased value in your home before it sold, in gross income? Also discuss the inclusion of income from illegal sources.