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23 September, 22:51

Which of the following must be included in Pete's income? 1. Short-term capital gains of $10,000 from the sale of stock. 2. Long-term capital gains of $80,000 from the sale of real property. 3. Interest income from Pete's savings account. 4. A gift from Pete's brother of $15,000.

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  1. 23 September, 22:57
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    1. Short-term capital gains of $10,000 from the sale of stock.

    2. Long-term capital gains of $80,000 from the sale of real property.

    3. Interest income from Pete's savings account.

    Explanation:

    Short term capital gains are taxed at the same rate as gross income. Long term capital gains are taxed at lower rates which range from 0-20%. Interest income is also taxed at the same rate as gross income.

    Gifts that are up to $15,000 are not taxed, so Pete is basically on the edge there but he doesn't have to pay taxes.
  2. 24 September, 00:18
    0
    1. Short-term capital gains of $10,000 from the sale of stock.

    2. Long-term capital gains of $80,000 from the sale of real property and

    3. Interest income from Pete's savings account.

    Explanation:

    An income statements shows revenue, expenses and net income over a specified period of time. Revenue (gross revenue or sales revenue) consists of cash inflows and interests both short term and long term such as profits, interest on investments. Expenses consist of cash outflows, using-up of assets and incurred liabilities such as tax, rents and so on. Gifts are not included as part of income statements
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