During the Year, Cathy Received the Following: • Dividends of $4,000

question 84

Multiple Choice

During the year, Cathy received the following: • Dividends of $4,000 from Lindsay Corporation. Cathy's father owns the stock and directed the corporation to the dividends to Cathy.
• A car worth $30,000 for being the 1,000^th customer at a car dealership.
• $5,500 cash gift from her uncle.
• $10,000 inheritance from her grandmother.
What amount must Cathy include in gross income?

• A) $39,500
• B) $30,000
• C) $49,500
• D) $34,000

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Definitions:

Risk

The potential for loss or unfavorable outcomes in any given situation, often assessed in finance as the variability of returns on investments.

Return

Return refers to the gain or loss on an investment over a specific period, including income received and the change in value, usually expressed as a percentage of the investment’s initial cost.

Investment Horizon

Time horizon for purposes of investment decisions.

Liquidated

Converted assets into cash or paid off a debt, often referring to the process of closing a business and distributing its assets to claimants.