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1.Al and Mary have been married for 10 years and live in New York. Mary works as an accountant and earned $150,000 in salary. They earned interest income in a joint savings account of $300. Also, they have municipal bond interest of $1,000 from the city of Orlando Florida. They sold a vacation home for $95,000. They purchased that property 3 years at a cost of $90,000. In addition, they sold shares of EOX for $45,000. They purchased the shares 5 years ago at $60,000. They are going to file MFJ. What is the amount of their taxable income?

2.Dean (age 45) is single and provides more than 50% of the support of Tammy (a family friend), and Jen (a niece, age 18). Both Tammy and Jen live with Morgan. Dean earns a salary of $87,000, contributes $2,000 to a traditional IRA, and receives sales proceeds of $15,000 for an RV that cost $60,000 and was used for vacations. In addition, he won $500 playing scratch off lotto tickets. He has $8,200 in itemized deductions. Dean's taxable income is?

3.Hank is an excellent handy man. As a semi-retired person, he does work for neighbors. He had the following business transactions

1) Hank billed a client $500. The client gave Hank $200 in the current tax year and agreed to pay the balance next year.

2) Hank received 4 tickets to a game. The tickets have a face value of $250 and can easily be sold for $350.

How much income does Hank need to report in the current year?

4.Mary purchased an annuity that pays her $500 per month for the rest of her life. She paid $70,000 for the annuity. Based on IRS annuity tables, Mary's life expectancy is 16 years. How much of the first $500 payment will Mary include in her gross income (round to the dollar)?

5.On January 1, 2020, Kate, a cash basis taxpayer, pays $46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kate receives $50,000. How much interest income does Kate recognize at December 31, 2020?

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