True or False 1 interest on a State of Virginia income tax r

True or False

1.) interest on a State of Virginia income tax refund is not subject to Federal income tax. (T/F)

2.) A cash payment received by an employee from his or her employer can never be excluded from income under the gift rules. (T/F)

3.) Sam received $100,000 of salary, interest, and dividends this year. He also received $10,000 as worker\'s compensation benefits. Sam must include 85% of the worker\'s compensation benefits in gross income for this year. (T/F)

Solution

1) Solution: FALSE

Explanation: The interest on a State of Virginia income tax refund is subject to Federal income tax

2) Solution: True

Explanation: A cash payment received by an employee from the employer must be included from income under the gift rules

3) Solution: False

Explanation: Sam is allowed to exclude worker\'s compensation benefits in gross income for this year