In $2024,$ Frank Fox won $$10,000$ in a state lottery. He also lost $$3,000$ at the horse races. He itemized his deductions on Schedule A$.$ On his income tax return he should report:

Question $26$ options:

$1)$

$$10,000$ gross income

$2)$

$$7,000$ gross income

$3)$

$$10,000$ gross income and $$3,000$ deduction for adjusted gross income

$4)$

$$10,000$ gross income and a $$3,000$ itemized deduction as part of his Schedule A total allowable itemized deductions