1(b) Mason, an accrual basis taxpayer, owns a six-unit apartment building for which he receives rent of $600 per month per unit. In 2009, five of the units were rented for the entire twelve-month period. The sixth unit was occupied from January 1st through March 31st. Upon vacating the unit, the tenant was not refunded his security deposit of $400 due to damages to the unit. The unit was subsequently rented for one year beginning August 1, 2009. On August 1st, the new tenant paid the first and last month's rent and a refundable security deposit of $400. What is Mason's total rental income for 2009? a. $40,800 b. $41,200 c. $41,800 d. $42,200 1(c) Richard and Alice Kelley lived apart during 2009 and did not file a joint tax return for the year. Under the terms of the written separation agreement they signed on July 1, 2006, Richard was required to pay Alice $1,500 per month of which $600 was designated as child support. He made 12 such payments in 2009. Assuming that Alice has no other income, her tax return for 2009 should show gross income of: a. $0 b. $5,400 c. $10,800 d. $12,600 1(d) Which one of the following distributions is nontaxable? a. Mutual fund distributions from its net realized long-term capital gains in the amount of $1,000. You have an adjusted basis of $10,000 in the mutual fund. b. Return of capital distribution from a utility company in the amount of $2,000. You have a zero basis in this stock. c. Dividend on insurance policy in the amount of $1,000. As of the date of this dividend your net premiums exceed the total dividends by $3,500. d. Your share of an ordinary dividend received by an S corporation in the amount of $25,000. Learning Outcome No. 2: Describe and apply the rules for determining filing status of individual taxpayer(s), qualifying dependent(s) and personal exemption deductions