#$1.$ Which of the following items are inclusions in gross income?

During the year, stock that the taxpayer purchased as an investment doubled in value.

Amount an off$-$duty motorcycle police officer received for escorting a funeral procession.

While his mother was in the hospital, the taxpayer sold some of her jewelry to help pay for the hospital bills.

Child support payments received.

A damage deposit the taxpayer recovered when he vacated the apartment he had rented.

Interest received by the taxpayer on an investment in general purpose bonds issued by IBM.

Amounts received by the taxpayer, a baseball $$Hall of Famer,$$ for autographing sports equipment $($e$.$g$.,$ balls and gloves$).$

Tips received by a bartender from patrons. $($Taxpayer is paid a regular salary by the cocktail lounge that employs him.$)$

Taxpayer sells his Super Bowl tickets for three times what he paid for them.

Taxpayer receives a new BMW from his grandmother when he passes the CPA exam.

#$2.$ Which of the following items are exclusions from gross income?

Alimony payments received $($relates to a divorce settlement in $2016).$

Damages award received by the taxpayer for personal physical injury$$none were for punitive damages.

A new golf cart won in a church raffle.

Amount collected on a loan previously made to a college friend.

Insurance proceeds paid to the taxpayer on the death of her uncle$$she was the designated beneficiary under the policy.

Interest income on City of Chicago bonds.

Jury duty fees.

Stolen funds the taxpayer had collected for a local food bank drive.

Reward paid by the IRS for information provided that led to the conviction of the taxpayer$$s former employer for tax evasion.

An envelope containing $$8,000$ found $($and unclaimed$)$ by the taxpayer in a bus station.

#$3.$ In $2023,$ David is age $78,$ is a widower, and is being claimed as a dependent by his son. How does this situation affect the following?

David$$s own individual filing requirement.

The standard deduction allowed to David.

The availability of any additional standard deduction.

#$4.$ Critical Thinking

LO$\mathrm{.}4$ Magda maintains a household that includes a son $($age $30)$ and a cousin $($age $28).$ She can claim the cousin as a dependent but not her son. Explain.

#$5.$ Isabella, Emma, and Jacob share equally in the support of their parents. Jacob tells each of his sisters to claim one of their parents as a dependent. Explain what Jacob means.

$6.$ Critical Thinking

LO$\mathrm{.}4$ Mark and Lisa were divorced in $2022.$ In $2023,$ Mark has custody of their children, but Lisa provides nearly all of their support. Who is entitled to claim the children as dependents?

#$7.$ Casey is a U$.$S$.$ citizen employed by a multinational corporation at its London office. Casey is married to Michael, a British citizen, and they reside in England. Michael receives substantial rent income from real estate he owns in western Europe.

Must Casey file a U$.$S$.$ income tax return?

Under what circumstances might Michael be considered a resident of the United States? Would such a classification be advantageous? Disadvantageous? Explain.