19. Dr. Smith purchased a bond on April 1, 2019, at par of $100,000 plus accrued interest of $1,500, for a total purchase price of $101,500. On December 31, 2019, Dr. Smith collected the $6,000 interest for the year. On January 1, 2020, Dr. Smith sold the bond for $102,000. a. He must recognize $4,500 interest income for 2019 and a $2,000 gain on the sale of the bond in 2020. b. He must recognize $6,000 interest income for 2019 and a $2,000 gain on the sale of the bond in 2020. c. He must recognize $4,500 interest income for 2019 and a $500 gain on the sale of the bond in 2020. d. Daniel must recognize $6,000 interest income for 2019 and a $500 gain on the sale of the bond in 2020. e. None of these. 20. Jill gave 100 shares of Sulphur-Chem Inc. to her son on June 30, 2019. Sulphur is a publicly held company and has declared its annual dividend on July 2 every year since 1975. Sulphur declared a $5.00 per share on July 2, 2019, payable on July 15, 2019 to shareholders of record as of July 10th. The son received the $500 dividend on July 18, 2019 and sold the stock on July 20, 2019. a. Jill must recognize income of $500 because the purpose of the gift was to avoid taxes. b. Jill must recognize income of $500 because the son did not hold the stock for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date c. Jill must recognize $250 of the dividend because she owned the stock for half of the year. d. Jill must recognize income of $500 because she constructively received the dividend. e. The son must recognize income because he owned the stock when the dividend was declared and received the $500. 21. Ming retired from his job as an IRS agent in 2019. He will receive a retirement annuity of $1,000 each month and his life expectancy is 150 months. He contributed $30,000 to the pension plan during his 35-year career, so his adjusted basis is $30,000. Jay collected 160 payments before he died. Which of the following is correct? a. The first $30,000 received is a nontaxable recovery of capital, and all subsequent payments are taxable. b. The first $120,000 he receives is taxable c. Since Ming is retired from a federal position, none of his payments are included in gross income. d. All of the last 10 payments he receives ($10,000) are taxable. e. None of these