Prepare a professional response to the client letter. If applicable, include the tax code or IRS regulations that apply to the scenario.

To my accountant:

My name is Aurora Beauty. I have experienced the most unusual year. I had several unique income experiences after awaking from a coma. First, my boyfriend, Philip, took me to the most amazing sporting event, the Moors Derby, where I won a brand new electric carriage. It was valued at $35,000 and while I loved the rose pink color it just seemed impractical as a daily vehicle, so I opted for the cash option of $28,000. The very next month, I was surprised with a special invitation to a filming of the Price is Right for previous coma survivors. I couldn't believe when my winning bid on the Rolex of $2,300 was exactly right, so I also received $500 out of Drew's pocket. I then made history when I won $50,000 playing Plinko by hitting the $10,000 spot every time. Unfortunately, I did not make it to the Showcase Showdown. Lastly, my horrendous Aunt Maleficent passed away, but left me the keys to her kingdom in the amount $500,000 as the beneficiary of her life insurance. How strange, as I always thought she hated me.

I do not believe any of this money should be taxed because for the Derby, I didn't buy my ticket, it was a gift from my boyfriend, so I see the carriage prize as a gift from him. Also, the Price is Right winnings only occurred because I was asked to attend as a coma survivor, so I did not actively pursue these winnings, they just fell in my lap. As for Aunt Maleficent leaving me money, how can I be responsible for taxes when she always acted as though she wanted me dead. I am reaching out to you because some dear personal advisors, Flora, Fauna, and Merriweather seem to think I may be incorrect. Can you please advise me if I have a tax obligation for these various windfalls I received. It would be most helpful, if you could explain the reasons why and rules related to these instances just in case next year is as fruitful.

Her Royal Highness

Aurora Beauty

Answer rating: 100% (QA)

Dear Aurora Beauty Thank you for reaching out to me about your recent windfalls I am sorry to hear a... View the full answer