1. Which of the following is true regarding a nonbusiness bad debt?

A) It is deductible as a short-term capital loss

B) It is not deductible

C) It is deductible only if you itemize

D) It is deductible as a long-term capital loss

2. During 2016, Anne Apple received tangible personal property as a safety achievement award from her employer. The award was not a qualified plan award. The property cost the employer $500 and had a fair market value of $600. How much must Anne include in her 2016 gross income?

A) $0

B) $200

C) $500

D) $600

3. Holly and Harp Oaks were divorced in 2013. The divorce decree was silent regarding the exemption for their 12-year-old daughter, June. Holly has legal custody of her daughter and did not sign a statement releasing the exemption. Holly earned $8,000 and Frank earned $80,000. June had a paper route and earned $3,000. June lived with Harp 4 months of the year and with Holly 8 months. Who may claim the exemption for June in 2016?

A) June may, since she had gross income over $3,000 and files her own return.

B) Since June lived with both Holly and Harp during the year, they both may claim her as an exemption

C) Holly may, since she has legal custody and physical custody for more than half the year

D) Harp may, since he earned more than Holly and, therefore, is presumed to have provided more than 50% of June's support.