AICPA Exam CPA-Regulation Topic 1 Question 30 Discussion

RULE: Gross income includes all income unless it is specifically excluded in the tax code.

Choice 'd' is correct. Wages and all unemployment compensation are not excluded from being taxable; therefore, there are included in the taxpayer's gross income for tax purposes.

Choice 'a' is incorrect. All forms of unemployment compensation are included as part of gross income. Choice 'b' is incorrect. The $4,000 of state unemployment compensation received is included as part of gross income.

Choice 'c' is incorrect. The $2,000 of his former employer's company-paid supplemental unemployment benefit plan is included as part of gross income.