In 2013, Joan accepted and received a $10,000 award for
outstanding civic achievement. Joan was selected without any
action on her part, and no future services are expected of her as a
condition of receiving the award. What amount should Joan
include in her 2013 adjusted gross income in connection with
this award?

(d) The requirement is to determine the amount of a
$10,000 award for outstanding civic achievement that Joan
should include in her 2013 adjusted gross income. An award for
civic achievement can be excluded from gross income only if the
recipient was selected without any action on his/her part, is not
required to render substantial future services as a condition of
receiving the award, and designates that the award is to be directly
transferred by the payor to a governmental unit or a taxexempt
charitable, educational, or religious organization. Here,
since Joan accepted and actually received the award, the $10,000
must be included in her adjusted gross income.