1. Freda purchased a certificate of deposit for $25,000 on July 1, 2018. The certificate's pays interest at a 3% rate. On November 1, 2019 Freda gives the certificate to her niece, Fredericka. a. How much income will Freda have to recognize in 2018? 25000 x 03 x 6/12-$375 b. How much income will Freda have to report in 20192 25000 x.03 x 10/12 $625 2. Ray decides to buy a personal residence and goes to the bank for a $150,000 loan. The bank tells him that he can borrow the funds at 4% if his father will guarantee the debt Ray's father, Hank, owns a $150,000 CD currently yielding 3.5%. Hank tells Ray that will cash in the CD and loan Ray the money at 2%. The federal rate is 396. a. What are the tax effects to Ray if Ray borrows money from Hank? b..What are the tax effects to Hank if he cashes out his CD and loans the money to Ray under the terms described? 3. Jay, a single taxpayer, retired from his job as a public school teacher in 2018. He is to receive a retirement annuity of $1,200 each month and his life expectancy is 180 months. He contributed $36,000 to the pension plan during his 35-year career, so his adjusted basis is $36,000 a. How much income must Jay report in 2019? b. Assume Jay collected 192 payments before he died. What is the correct method for reporting the pension income? How much of the last 12 months of payments received will be taxable