(TCO E) Sandy Smith files a return as a head of household. Items of income received by Sandy in 2011 were as follows.
Interest on savings account with Wells Fargo: $500
Interest on state income tax refund: $50
Gambling winnings: $1,000
Dividends from mutual life insurance company on life insurance policy: $1,000
Dividends from Better Auto Co. received on January 2, 2011: $875
The total dividends received on the life insurance policy do not exceed the aggregate of the premiums paid to the company.
(a) How much should Sandy include in her 2011 taxable income as interest?
(b) How much should Sandy report as dividend income for 2011?
(c) How much should Sandy include in taxable "Other Income" for her state lottery winnings?