You are a junior accountant at a medium-sized CPA firm. Your department has flagged several cases that require a review of gross income. The research you perform will assist you in determining if the item under review needs to be reported as income and, if so, how. Your manager would like you to document your interpretation of the Internal Revenue Code (IRC) and requirements to report (or not report) on the three cases under review.

Specifically, you must address the following rubric criteria for each of the three cases you choose to research:

1. State an opinion on whether income is taxable or nontaxable that is supported by research.
2. Select a confidence level in the research. Choose high, medium, or low.
3. Interpret the confidence level by connecting the research to the determination of taxability, making specific points. Include the following:
   1. Explain why the research topic is taxable or not based on research.
   2. Determine if additional information is needed to increase your confidence level.

Based on your research, you will gauge your opinion of the tax position for each case and the confidence level followed by your interpretation of the IRC. Youll also make suggestions or requests for further information, as needed.

1. A married couple, Xi and Francis, have sold their primary residence. They purchased the home for $150,000 thirty years ago and sold the home for $780,000.
2. Retired Army veteran, Korey, received grant funding in the amount of $10,000 for education, training, and subsistence allowance and $3,000 for his home to be designed for wheelchair living. These funds were paid to Korey by the Department of Veteran Affairs (VA).
3. Grace-Ann received $100 a week for 12 weeks to babysit her grandson, Alec, while his parents were at work.