(Answered) Question - you are lucky to have won a new automobile

Accounting

Question - You are lucky to have won a new automobile, received a gift from a rich Aunt, won an award for literary achievement, and your employer just notified you, on the day you are retiring, that he was giving you $30,000 for your 25 years of outstanding service.

Briefly discuss:

• The tax consequences of each;

• Which result in the least amount of gross income; and

• What could be done to minimize your gross income?

Why might your employer want to consider the payment a bonus while you prefer to consider it a gift?

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