Teresa Was Married on November 1 of This Year and on That

question 58

Essay

Teresa was married on November 1 of this year and on that day received numerous gifts from her extended family. Her grandfather presented Teresa with a check for $15,000; her uncle gave Teresa 1,000 shares of Ford stock worth $10 per share (the uncle purchased the shares for $25 each); and her aunt presented Teresa with $50,000 of corporate bonds (Teresa received $1,500 of semiannual interest from the bonds on December 31 of this year). Finally, Teresa's parents paid off $50,000 of her student loans debt including $2,000 of accrued interest. What amount, if any, must Teresa include in gross income this year?

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Definitions:

Replacement Decision

The evaluation process for determining whether to repair, maintain or replace an asset or piece of equipment.

Volume Of Operations

The scale or magnitude of the business activities that a company carries out in a specific period.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not be considered in new decision making.

Financing Costs

Expenses incurred by a company to finance its operations or to raise capital, such as interest payments on loans.