Question

Give two examples of gross income exclutiuons.

Answer 1

For individuals, gross income means the sum total of wages, salaries, rents, profits, and other forms of earnings, before any deductions or taxes is deducted.

Certain types of income are specifically excluded from gross income. Following are the examples of gross income exclusions for federsl income tax purposes:

• Life insurance amount received upon the death of the insured person.
• Tax exempt interest. Interest received on state and municipal bonds is excluded from gross income.