Sanjays salary is 44000 and he received dividends of 600 He

Sanjay’s salary is $44,000, and he received dividends of $600. He also received a statement from SK partnership showing his share of the partnership income was $4,000. The partnership also distributed $1,000 to Sanjay during the year and $600 after year-end. Sanjay won $2,000 in the state lottery, but he spent $50 on lottery tickets. Which of the above amounts are taxable

Solution

Amounts that are taxable on Sanjay

-----TAXABLE------

Salary - $44,000

Dividends - $6,000

Partnership Income - $4,000

Lottery Price - $2,000

-------NON-TAXABLE--------

Sanjay has already paid the tax for the partnership income of $4000

Hence the amount distributed due to the partnership won\'t be taxanle

The partnership also distributed $1,000 to Sanjay during the year and $600 after year-end

The above amount won\'t be taxable

The lottery ticket also won\'t be taxable since the amount used to buy the ticket is already being taxed