1. Bill and Jane Jones were divorced on January 1, 2019. They have no children. In accordance with the divorce decree, Bill transferred the title of their house over to Jane. The home had a fair market value of $250,000 and was subject to a $100,000 mortgage. Under the divorce agreement, Bill is to make $1,000 monthly mortgage payments on the home for the remainder of the mortgage. In the current year, Bill made 12 mortgage payments. What amount is taxable to Jane in the current year? 2. Arnold was employed during the first six months of the year and earned a $90,000 salary. During the next six months, he collected $3,000 of unemployment compensation, borrowed $6,000 (using his personal residence as collateral), and withdrew $1,000 from his savings account (including $100 interest). When he left his former employer, he withdrew his retirement benefits (a qualified annuity) in a lump sum of $50,000. He made no contributions to the plan. Arnold's parents loaned him $10,000 (interest-free) on July 1 of the current year, when the Federal rate was 3%. Arnold did not repay the loan during the year and used the money for living expenses. Calculate Arnold's adjusted gross income for the year. 3. Emily, who is single, has been offered a position as a city landscape consultant. The position pays $150,000 in cash wages. Assume Emily has no dependents. Emily deducts the standard deduction instead of itemized deductions, and she is not eligible for the qualified business income deduction. (Use the tax rate schedules.). What is her Taxable Income? What is her Tax Liability? 4. Determine the amount of taxable income that should be reported by a cash-basis taxpayer in 2020 in each of the following independent cases: a. A taxpayer completes $300 of accounting services in December 2020 for a client who pays for the accounting work in January 2021. b. A taxpayer is in the business of renting computers on a short-term basis. On December 1, 2020, she rents a computer for a $120 rental fee and receives a $300 deposit. The customer returns the computer and is refunded the deposit on December 20, 2020. C. An accountant agrees to perform $325 of tax services for an auto mechanic who has agreed to perform repairs on the car of the accountant's wife. The mechanic repairs the car in December 2020 and the accountant starts and completes the tax work in March 2021.