Intuit Academy Tax Practice Exam

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Question: 1 / 400

Which of the following is NOT included in taxable income?

Rental income.

Salaries.

Gifts received during the year.

Gifts received during the year are generally not included in taxable income because the Internal Revenue Code excludes such gifts from taxation. This means that if an individual receives a gift, they do not need to report it as income when filing their tax return. The rationale behind this exclusion is to encourage the act of giving without imposing a tax burden on the recipient.

In contrast, rental income, salaries, and interest earned are all forms of income that are subject to taxation. Rental income is considered business income and must be reported, salaries are compensation for services rendered and are taxable, and interest earned on investments or savings is also taxable income. Thus, the correct understanding of what constitutes taxable income confirms that gifts received do not fall under this category.

Intuit Academy Tax Practice Exam

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