Answer the following questions.

(Total: 20 points)

1. Enumerate the characteristics of gross income. (3 points)

2. What are the capital items considered with infinite value? Enumerate and discuss.
(9 points)

3. When is income considered realized? (2 points)

4. Distinguish exchange from transfer. (2 points)

5. What is a complex transaction? How it is taxed? (4 points)

B. Exercise Drill No. 1: Return of capital and Return on capital