Question
1. On February 10, 2020, Rose was in an automobile accident while she was going to work. The doctor advised her to stay home for
1. On February 10, 2020, Rose was in an automobile accident while she was going to work. The doctor advised her to stay home for six months due to her injuries. On February 25, 2020, she files a lawsuit. On July 20, 2020, Rose returned to work. On December 15, 2020, the lawsuit was settled received the following amounts:
Compensation for lost wages | $25,000 | |
Personal injury damages awarded (none of which was for punitive damages) | 40,000 |
How much of the settlement must Rose include in ordinary income on her 2020 tax return?
A) $0 B) $25,000 C) $40,000 D)$65,000
2. Mr. and Mrs. Garden filed a joint return for 2020. Mr. Garden received $8,000 in Social Security benefits and Mrs. Garden received $4,000. Their income also included $10,000 taxable pension income and interest income of $2,000. What part of their Social Security benefits will be taxable for 2020 ?
A) $0 B) $12,000 C) $24,000 D) $6,000
3. Victor and Claire Anet, residents of a separate property state, were divorced in February 2017 . Specific requirements of the divorce decree and Mr. Anet's performance of those requirements follow: Transfer title in their personal residence to Claire as part of a lump-sum property settlement. On the day of the transfer, Victor's basis in the house was $38,000, the fair market value was $42,000, and the property was subject to a mortgage of $20,000. Make the mortgage payments on the 20-year mortgage. He paid $2,500 from March 1, 2020, through December 31, 2020. Repay to Claire a $3,000 loan, which he did on April 1, 2020 . Pay Claire $700 per month of which $200 is designated as child support. He made ten such payments in 2020. Assuming that Claire has no other income, her 2020 gross income should be:
A) $7,500 B) $9,500 C) $12,500 D) $16,000
I need help with these questions urgently, please!!
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