In 2019, Albert received a Form W-2 from his employer, Coconut Grove Fishing Charters, Inc. Albert and Allison also received three Forms 1099. The Gaytors also received interest of $751 from bonds issued by the Miami-Dade County Airport Authority (Form 1099 not shown). Albert went to the casino on his birthday and won big, as reflected on the following Form W-2G.

Albert had no other gambling income or losses for the year.

In February, Allison received $50,000 in life insurance proceeds from the death of her friend, Sharon.

In July, Alberts uncle Ivan died and left him real estate (undeveloped land) worth $72,000.

Five years ago, Albert and Allison divorced. Albert married Iris, but the marriage did not work out and they divorced a year later. Under the July 1, 2015 divorce decree, Albert pays Iris $11,500 per year in alimony. All payments were on time in 2019 and Iris Social Security number is 667-34-9224. Three years ago, Albert and Allison were remarried.

Coconut Fishing Charters, Inc. pays Alberts captains license fees and membership dues to the Charter Fishermans Association. During 2019, Coconut Fishing paid $1,300 for such dues and fees for Albert. Allison was laid off from her job on January 2, 2019. She received a Form 1099-G for unemployment benefits.

Albert and his family are covered by an employee-sponsored health plan at his work. Coconut Fishing pays $700 per month in premiums for Albert and his family. During the year, Allison was in the hospital for appendix surgery. The bill for the surgery was $10,100 of which the health insurance reimbursed Albert the full $10,100. Coconut Fishing also pays for Alberts parking at the marina. The monthly cost is $120.

1. Discuss the nature of income based on what is presented in Gaytor's chapter 2.
   • (a) Which are taxable income?
   • (b) Which (if any) are excluded from income taxability?
   • (c) Which (if any) are tax-deferred?
2. Discuss the character of income ( a different tax treatment for this type of income?) Provide how is that information being earned and reported by Gaytor.
   • (a) ordinary income,
   • (b) capital gains income