Which items received by Ted are excluded from gross income?

The tuition scholarship received by Ted is excluded from gross income because educational scholarships are typically not considered taxable income, provided that the funds are used for qualified educational expenses, such as tuition and fees. This exclusion is rooted in the tax code, which recognizes the importance of financial assistance for education and encourages individuals to pursue their studies without being penalized through taxation.

In contrast, the other items, including the autographed guitar and cash, would generally be included in gross income. Cash received is subject to taxation as income, while the value of the guitar would also likely be taxable if it was received as compensation or a gift without a specific exception applying. Thus, understanding how the tax code treats different forms of income is crucial for determining what qualifies for exclusion from gross income.