Which of the Following Items Will Result in an Inclusion

question 638

Multiple Choice

Which of the following items will result in an inclusion in gross income?

• A) Jane receives a check from her stock broker for $50,000 due to the sale of stock purchased five years ago for $60,000.
• B) Due to the discovery of oil beneath Finn's land, the value of Finn's land increases $1,000,000.
• C) A 10% stock dividend for all shareholders is declared by the board of directors of a publicly- traded corporation. Mel receives 10 shares of stock worth $1,000.
• D) George won $50 at his church's bingo game night.

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Definitions:

Discounted Payback

The period it takes for an investment to break even in cash flow terms, adjusted for the time value of money.

Required Return

The minimum gain or profit that investors expect to receive on an investment relative to its risk.

Average Accounting Rate

A financial metric that represents the average rate of return earned on investments or assets, based on accounting values.

Net Income

The total profit of a company after all expenses, including taxes and operational costs, have been deducted from total revenues.