What is the total amount that must be included in gross income on Adler's 2001 income tax return?

What is the total amount that must be included in gross income on Adler’s 2001 income tax return?

During 2001, Adler had the following cash receipts:

What is the total amount that must be included in gross income on Adler’s 2001 income tax return?
A . $18,000
B. $18,400
C. $19,500
D. $19,900

Answer: C

Explanation:

Choice "c" is correct. The wages of $18,000 and unemployment compensation are both includable in gross income on Adler’s 2001 income tax return.

Choice "a" is incorrect. The unemployment compensation must be included in gross income.

Choice "b" is incorrect. Municipal bond interest income is excluded from gross income and the unemployment compensation must be included in gross income.

Choice "d" is incorrect. Municipal bond interest income is excluded from gross income.