I'm wondering how an individual would be able to prove "income" as nontaxable in the event they were being audited? For example, gift money.
In a more complex example, let's say I made an ATM withdrawal of $200 to loan to a friend last year. He then pays me back and I want to deposit it back into my account this year. Also, my wife(whom I filed jointly with and had the tax return sent to her bank account) gives me $300 from our tax return we that we received last year, and I want to deposit this into my account at the same time.
How could I prove this $500 that I'm depositing is not taxable income?
