$1.$Betty Baker received the listed items during year $200.$

Kickbacks

Jury duty fees

Punitive damage award

Tips $($waitress$)$

Which of the listed items would normally constitute gross income?

A Jury duty fees and punitive damage award only

B Jury duty fees only

C Jury duty fees and tips only

D All would constitute gross income

E None would constitute gross income

$2.$Taxpayers, age $72$ and $69$ and filing jointly, report $203$ salary income of $38,000,$

municipal bond interest income of $$3,000,$ taxable interest income of $$1,000,$ and

Social Security benefits of $$24,000.$ What amount, if any, of the Social security

benefits must be reported as gross income on Taxpayers $20$x$3$ Form $1040?$

E None of the above

$3.$On August $4,20$x$1,$ calendar year taxpayer Ben Baker acquired and placed in service

in his sole proprietorship a machine at a cost of $$70,000.$ Assume that the

machine has a useful life of $15$ years and a salvage value of $$10,000.$ Assume also

that the machine is a MACRS $7$ year asset, that Ben will not claim an IRC $179$

deduction or bonus depreciation, and that Ben purchased no other depreciable

assets during the year. What depreciation deduction will Ben claim on his

$203($third year$)$ Form $1040,$ Schedule C$?$