1. Gambling losses. Khanh played poker four times during the year. She had two winning sessions, winning $4,700 in one and $3,500 in the other. She had two losing sessions, losing $7,200 in one and $2,600 in the other. How much is the itemized deduction for gambling losses that Khanh can claim?

2. Legal damages. Daomei suffered a serious infection and lost a leg as a result of medical malpractice. Daomei sued the hospital where she was treated. She won the case and was awarded the following amounts as damages: $14,000 for medical expenses, $30,000 for emotional distress resulting from the injuries and $80,000 as punitive damages. How much gross income must Daomei recognize?