1. Adam repairs power lines for the Egret Utilities Company. Generally, he is out on calls during the lunch hour. In the current year, the company paid Adam $800 to cover his cost of lunch meals eaten.

a. Adam is not required to recognize any income unless his actual cost of the meals was less than $800

b. Adam is not required to recognize any income from the above, if he worked so far from his home that it was not practical to go home for lunch.

c. If Adams actual cost of the meals exceeded $800, Adam can deduct the additional amount

d. Adam must include the $800 in his Gross Income

e. None of the above

2. Under the terms of a post in 1986 divorce agreement, Lillian is to receive the home that she and her former husband owned jointly. The house cost $400,000 and now has a FMV of $600,000. Lillian must

a. Include $400,000 in GI as alimony

b. Include $600,000 in GI as alimony

c. Include $200,000 in GI as alimony

d. Not report any GI from the payments

e. None of the above

3. Drew Akron took out a student loan to attend Queens College. In 2015 he paid interest on the student loan of $3000. He is currently single and has AGI of $35,000. His deductible interest, rounded off to the nearest dollar, is (phase-out is $65,000-$80,000):

a.$3,000

b. $2,500

c. $833

d. $1667

e. None of the above

4. Saul paid $6,000 premiums on his ordinary life insurance policy. He held the policy for 10 years and cashed it in prior to his death and received the cash-surrender value of $25,000 in the year Saul received the $25,000 he must include what amount in Gross Income?

a. $0

b. $10,000

c. $11,000

d. $19,000

e. $25,000