1. Peter, age 25, is single. He lives with his disabled and dependent mother, for whom he provides more than a half of support. Peter earned a $75,000 salary. His other income consisted of $2,000 interest from a bank account and $400 interest on municipal bonds that he previously had received as a graduation gift. In addition, he sustained a deductible capital loss of $5,000 from the sale of stock. His itemized deductions amount to $12,650. What is Peters taxable income?

a. $62,200

b. $55,350

c. $61,600

$55,950

2. In 2020, Luke and Sandra are married and file a joint tax return. They have two dependent children, ages 11 and 15. Their AGI is $407,500. Since 2016, Luke and Sandra have been taking care of Lukes elderly father Walter (age 79) for whom they provide more than half of support. How much child and dependent tax credit can Sandra and Luke take on their 2020 joint tax return?

a. $4,100

b. $4,000

c. $4,500

d. $4,400

3. On December 15, 2019, Monica, a cash basis taxpayer, received a gift from her parents for her birthday and decided to use the cash to purchase a certificate of deposit. She pays $89,000 for a 24-month certificate of deposit on January 1, 2020. The certificate is priced to yield 4.5%, with interest compounded annually. No interest is paid until maturity, when Monica receives $97,190. What is Monicas gross income from the certificate of deposit in 2021?

a. $4,374

b. $4,504

c. $4,185

d. $4,005

4. David, a single taxpayer has a $87,000 of gross income for 2020. David won a lottery prize in 2019 and on the advice of his girlfriend he decided to invest in corporate bonds and stocks. He purchased a corporate bond at its face amount of $17,000 on 4/1/2020. The bond pays 6% interest each 3/31. On 8/31/2020, David sold the bond for $20,000. How much capital gain(loss) should David recognize in 2020?

a. $2,500

b. $3,425

c. $3,000

d. $2,575