7. On July 1 on the current year, Ken Kershaw rents (ten-year term) an office building from landlord Marvin Muncy. Terms of the lease require Ken to pay monthly rent of $4,000 beginning on July 1 of each month and additionally require Ken to make an up-front payment of the first month rent, the last month rent, and a refundable damage deposit $2,500. During the current (first) year, Ken pays $24,000 (rent for July - December), $4,000 prepaid rent for the month of January of the second year, $4,000 (last month of ten-year term), and $2,500 refundable damage deposit, a total of $34,500. How much rent income should Marvin Muncy report on Form 1040 for the current year? A. $ 34,500 B. 28,000 C. 30,500 D. 24,000 E. None of the above 8. Taxpayer Ronald Roberts owes the Acme Credit Card Company $24,000. In addition to the $24,000 liability, Ronald also has other debts of $20,000. Ronald has assets worth $40,000. Acme forgives $10,000 of the $24, owed to it. How much gross income should Ronald report on his Form 1040 for the year of forgiveness? $ 10,000 6,000 0 D. 4,000 E. None of the above 9. Melvin May, age 66, purchases a joint and survivor annuity at a cost of $400,000. The annuity will pay $2,000 per month to Melvin for his life and upon Melvin's death to his spouse, Mary, age 67, for the remainder of her life. The annuity payments begin immediately. How much gross income will Malvin report on Form 1040 for the first full year (twelve months) of annuity payments? A. $ 16,780 B. 0 C. 7,470 7,120 E. None of the above