1. Which of the following types of income is taxable? A. Gross cash receipts from selling Walmart stock B. Interest income from an IlIlinois state bond. C. Entering an art contest and winning $750 for second place. D. A credit card balance that is forgiven through bankruptcy ruling. E. All excluded F. All taxable Your mother purchased a $200,000 life insurance policy many years ago. Over the life of the plan she pays $50,000 in premiums. She dies in the current year and you are approached by the company to take either $25,000 for 10 years or a cash value of $170,000. How are your taxes affected if you choose the annual plan? How are your taxes affected if you choose the cash value? (circle one in each list) 2. A. $0 included in income B. $25,000 C. $200,000 D. $5,000 E. $150,000 A. $0 B. $5,000 C. $25,000 D. $120,000 E. $170,000 3. You have both a scholarship and receive money from a 529 plan. Your tuition is $14,000. Your fees are $1200. You spend $1500 on books. You pay $2,500 to SIU for a food plan. You pay $3,000 to SIU for staying in the dorms. SIU requires you to live on campus. What is the total qualified education expenses related to the scholarship? What is the total qualified education expenses related to the 529 plan? (circle one in each list) A. $22,200 B. $19,200 C. $16,700 D. $15,200 E. $14,000 F. $22,200 G. $19,200 H. $16,700 I. $15,200 J. $14,000 McDonalds serves you very hot coffee. You burn your tongue. Everything now tastes bitter. A doctor says the burning is the cause of this. You get depressed because you no longer enjoy food. You sue McDonalds. You have $25,000 in doctor bills, lab reports, and surgery. You have $10,000 in bills from seeking therapy regarding your depression. The court awards you $50,000 to cover your bills and punish McDonalds. How much of this is taxable? 4. A. $50,000 B. $25,000 C. $15,000 D. $10,000 E. $0