1. Compute the taxable income for 2020 for Pierce on the basis of the following information. Pierce is married but has not seen or heard from his wife since 2017.

Salary 90,000

Interest on bonds issued by New York City 3,000 Interest on CD issued by Wells Fargo Bank 2,000

Cash dividend received on Chevron common stock 2,200

Life insurance proceeds paid upon death of aunt (Pierce was the designated beneficiary of the policy) 200,000

Inheritance received upon death of aunt 100,000

Jackson (a cousin) repaid a loan Pierce made to him in 2014 (no interest was provided for) 5,000

Itemized deductions (state income tax, property taxes on residence, interest on home mortgage, and charitable contributions) 10,700

Number of dependents (children, ages 17 and 18, and mother-in-law, age 70) 3

Age 43