A is corrent. Roger Burrows’ gross income is $5,700, consisting of $700 of dividends and the $5,000 prize. Scholarships awarded for tuition to candidates for a degree are excluded from gross income unless provided as compensation for services. Loans and cash support from parents are also excluded from gross income.
B is incorrect. The scholarship, loan, and support can be excluded.
C is incorrect. The cash prize must be included in gross income.
D is incorrect. The scholarship, loan, and support can be excluded.
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