Phelps competed at the Olympics. He won several gold medals and cash prizes, all worth $300,000. In addition, in the year that Phelps competed in the Olympics, he received several commercial sponsorships worth over $5 million. Can Phelps exclude from gross income the $300,000 in medals and cash prizes that he won at the Olympics? Question 8 options: a) Yes, because prizes won at the Olympics and Paralympics are excluded from gross income under IRC 74(d). b) No, because only one medal and prize are excluded from gross income. c) Yes, to the extent of one medal and one cash prize. d) No, because Phelps' income is over $5 million

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The correct answer is a Yes because prizes won at the Olympics and Paralympics are excluded from gross income under IRC 74d Lets break down the scenar... View the full answer