1- James, a cash basis taxpayer, received the following compensation and fringe benefits in the current year: Salary: $66,000. Disability income protection premiums: 3,000. Long-term care insurance premiums: 4,000. His actual salary was $72,000. He received only $66,000 because his salary was garnished and the employer paid the $6,000 owed on Jamess credit card. The wage continuation insurance is available to all employees and pays the employee three-fourths of the regular salary if the employee is sick or disabled. The long-term care insurance is available to all employees and pays $150 per day toward a nursing home or similar facility. What is Jamess gross income from the above?

a. $66,000.

b. $72,000.

c. $73,000.

d. $75,000.

e. None of these.

2- Kyle and Liza are married and under 65 years of age. During 2019, they furnish more than half of the support of their 19-year old daughter, Kendra, who lives with them. She graduated from high school in May 2018. Kendra earns$15,000 from a part-time job, most of which she sets aside for future college expenses. Kyle and Liza also provide more than half of the support of Kyles cousin who lives with them. Lizas father, who died on January 3, 2019, at age 90, has for many years qualified as their dependent. How many dependents can Kyle and Liza claim?

a. None

b. One

c. Two

d. Three

3- Sharon made a $60,000 interest-free loan to her son, Todd, who used the money to start a new business. Todds only sources of income were $25,000 from the business and $490 of interest on his checking account. The relevant Federal interest rate was 5%. Based on this information:

a. Todds business net profit will be reduced by $3,000 (0.05 $60,000) of interest expense.

b. Sharon must recognize $3,000 (0.05 $60,000) of imputed interest income on the below-market loan.

c. Todds gross income must be increased by the $3,000 (0.05 $60,000) imputed interest income on the below market loan.

d. Sharon does not recognize any imputed interest income and Todd does not recognize any imputed interest expense.

e. None of these is correct.

Please answer all 3 question. THANK YOU VERY VERY MUCH!