1- Ben was diagnosed with a terminal illness. His physician estimated that Ben would live no more than 18 months. After he received the doctors diagnosis, Ben cashed in his life insurance policy and used the proceeds to take a trip to see relatives and friends before he died. Ben had paid $12,000 in premiums on the policy, and he collected $50,000, the cash surrender value of the policy. Henry enjoys excellent health, but he cashed in his life insurance policy to purchase a new home. He had paid premiums of $12,000 and collected $50,000 from the insurance company.

a. Neither Ben nor Henry is required to recognize gross income.

b. Both Ben and Henry must recognize $38,000 ($50,000 $12,000) of gross income.

c. Henry must recognize $38,000 ($50,000 $12,000) of gross income, but Ben does not recognize any gross income.

d. Ben must recognize $38,000 ($50,000 $12,000) of gross income, but Henry does not recognize any gross income.

e. None of these.

2- Albert had a terminal illness that would require almost constant nursing care for the remaining two years of his estimated life, according to his doctor. Albert had a life insurance policy with a face amount of $100,000. He had paid $25,000 of premiums on the policy. The insurance company has offered to pay him $80,000 to cancel the policy, although its cash surrender value was only $55,000. He accepted the $80,000. Albert used $15,000 to pay his medical expenses. Albert made a miraculous recovery and lived another 20 years. As a result of cashing in the policy:

a. Albert must recognize $55,000 of gross income, but he has $15,000 of deductible medical expenses.

b. Albert must recognize $65,000 ($80,000 $15,000) of gross income.

c. Albert must recognize $40,000 ($80,000 $25,000 $15,000) of gross income.

d. Albert is not required to recognize any gross income because of his terminal illness.

e. None of these

3- Ron, age 19, is a full time graduate student at City University. During 2019, he received the following payments: Cash award for being the outstanding resident adviser $ 1,500 Resident adviser housing 2,500 State scholarship for ten months (tuition and books) 6,000 State scholarship (meals allowance) 2,400 Loan from college financial aid office 3,000 Cash support from parents 2,000 Ron served as a resident adviser in a dormitory and, therefore, the university waived the $2,500 charge for the room he occupied. What is Rons adjusted gross income for 2019?

a. $1,500.

b. $3,900.

c. $9,000.

d. $15,400.

e. None of these

Please answer all 3 question. THANK YOU VERY MUCH.