1. An individual received $50,000 during the current year pursuant to a divorce decree. A check for $25,000 was identified as annual alimony, checks totaling $10,000 as annual child support, and a check for $15,000 as a property settlement. What should be included in the individuals gross income?

2. Emma, age 33 is single and has no dependents. She earned $ 40,000 this year before she was fired for poor job performance. Emma subsequently received $3,000 this year in damages from a personal injury action. Prior to her firing, she injured her back upon lifting a file cabinet and received $5,000 in workers compensation. How much should Emma include in her gross income?

3. Joe received a full athletic scholarship for baseball at Superstar University. The scholarship includes $20,000 for tuition and fees, $5,000 for room and board, $750 for books and $500 for incidentals. How much must Joe include in income?

4. John, age 60, purchases an annuity from an insurance company for $90,000. He is to receive $500 per month for life. How much income must he recognize in the current year?

5. Don and Carol are married and filed a joint return. During the year they received the following :

Wages.. $25,000

Social Security Benefits. 12,000

Tax Exempt interest income... 10,000

Modified adjusted gross income 35,000

How much of the social security benefits are included in income?