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Questions and Answers
What type of income is considered taxable even if it's from a hobby?
Which type of income must be reported on Form 1040, Schedule 1, Line 21?
What form should be used to report bartering income?
What should be done with compensation for personal physical injury?
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What type of income must be reported if the winnings are $600 or more?
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What should be done with income from illegal activities?
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What type of income is considered illegal?
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What should be done with jury duty pay?
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What type of income must be reported if the payer provides a Form W-2G?
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What type of income must be reported if you receive virtual currency transactions?
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What should be done with court awards and damages?
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What type of income must be reported if debt was canceled, forgiven, or discharged?
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What should be done with prizes and awards?
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Study Notes
Reporting Various Types of Income on Your Tax Return
- Bartering is legal and taxable in the United States, and the fair market value of the goods or services received must be reported on Form 1040, Schedule 1, Line 8.
- Bribes and kickbacks are illegal and must be reported as income on Form 1040, Schedule 1, Line 8.
- Cancellation of debt income (COD income) must be reported on your tax return as income, and the amount of COD income is the amount of debt that was canceled, forgiven, or discharged.
- Gambling winnings must be reported on Form 1040, Schedule 1, Line 21, and if winnings are $600 or more, the payer must provide a Form W-2G.
- Hobby income is considered taxable income and must be reported on Form 1040, Schedule 1, Line 8.
- All income, including income from illegal activities, must be reported on your tax return.
- Jury duty pay, rental of personal property, court awards and damages, and prizes and awards must be reported as income.
- Compensation for personal physical injury, physical sickness, or emotional distress does not have to be reported as income.
- Virtual currency transactions must be reported as income.
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Description
Do you know how to properly report various types of income on your tax return? Take this quiz to test your knowledge and learn about the tax implications of bartering, bribes, cancellation of debt income, gambling winnings, hobby income, illegal activities, jury duty pay, rental of personal property, court awards and damages, prizes and awards, compensation for personal physical injury, and virtual currency transactions. Make sure you include these keywords in the title and description: income, tax return, reporting, fair market
