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b"If you work for a living, you know that your wages are taxable. You probably also know that most forms of investment income are taxable. But the IRS doesn't stop there. If you\\u2019ve picked up some extra cash through luck, athletic skill, or even criminal activities, there\\u2019s a good chance you owe taxes on that money as well. So here are nine things that you may not know are taxable:
(I realize that many items on this \\u201clist of taxable\\u201d will not apply to most of you, but it\\u2019s still a fascinating list nonetheless.)
Buried Treasure
In February 2013, a couple was walking their dog on their own rural property in northern California when they discovered six cans filled with 19th-century gold coins. Imagine that, what luck!\\xa0 They literally stumbled onto a mini-goldmine! Turns out, the coins were valued at up to $10 million and put up for sale privately and on Amazon.com. (Check it out if you\\u2019re interested in buying a few old gold coins.)
The couple has wisely chosen to stay anonymous, but they won\\u2019t be able to hide their good fortune from the IRS, which says that \\u201cFound Property\\u201d that was lost or abandoned is taxable at its fair market value in the first year that it\\u2019s your undisputed possession. That means the couple will have to pay federal taxes of 39.6% on their windfall, plus California state tax of up to 13.3%.
In case you\\u2019re interested, the precedent for the IRS\\u2019s \\u201ctreasure trove\\u201d rule dates back to 1964, when a couple discovered $4,467 in a used piano they had purchased for $15. The IRS, of course, immediately jumped on this and said the couple owed income taxes on the money and a U.S. District Court agreed.
Educational, Research, and Other Forms of Scholarships.
This is one that more of you are likely to encounter, and here\\u2019s how it works. If you receive a scholarship to cover tuition, fees, and books\\u2014 you know, core educational expenses\\u2014you don\\u2019t have to pay taxes on the money. But if your scholarship also covers room and board, travel, and other expenses, that portion of the award is taxable.
Likewise, students who receive financial aid in exchange for work, such as serving as a teaching or research assistant, must pay tax on that money, even if they use the proceeds to pay for direct expenses, such as tuition and books.
Stolen Property
This is one I am hoping none of my listeners have to worry about. If someone\\u2014clearly not you, my listener\\u2014robs a bank, embezzles money, or stages an art heist, the IRS expects them to pay taxes on the proceeds. As the IRS puts it, \\u201cIncome from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040. Bribes are also taxable\\u201d.
Now, in reality, I don\\u2019t see any criminals reporting his or her ill-gotten gains on their tax returns. But, if caught, the feds can add tax evasion to the list of charges against you. That\\u2019s what happened to notorious gangster Al Capone, who served 11 years for tax evasion because he never filed a tax return on his ill-gotten gains.
Gambling Winnings
Here\\u2019s one that could apply to some of you. Despite the tagline, \\xa0\\u201cWhat happens in Vegas, stays in Vegas\\u201d, it doesn't necessarily stay in Vegas. Gambling income includes winnings from lotteries, horse races, and casinos. The payer\\u2014the casino or the lottery operator, say\\u2014is required to give you a Form W2-G (which they also report to the IRS) if you win $1,200 or more from bingo or slot machines, $1,500 or more from keno, over $5,000 from a poker tournament, or $600 or more at a horse track. But even if you don't receive a W2-G, the IRS expects you to report gambling proceeds on line 21 (other income) of your 1040.
The good news, on the flip side\\u2014and something that could apply to more of us\\u2014is if you itemize deductions when filing your tax returns, gambling losses are deductible, but only to the extent of the winnings you report as income. For example, if you won $4,"