Although Hank is retired, he is an excellent handyman and often works part time on small projects for neighbors and friends Last week his neighbor, Mike, offered to pay Hank $500 for minor repairs to his house Hank completed the repairs in December of this year Hank uses the cash method of accounting and is a calendar year taxpayer Mike gave Hank tickets in December to the big game in January The tickets have a face value of $50 but Hank could sell them for $475 Hank went to the game with his son What is Hanks gross income for this year Louis files as a single taxpayer In April of this year he received a $900 refund of state income taxes that he paid last year Last year Louis claimed itemized deductions of $12,700 Louiss itemized deductions included state income taxes paid of $1,750 How much of the refund, if any, must Louis include in gross income Assume the standard deduction last year was $12,400 Anne purchased an annuity from an insurance company that promised to pay her $20,000 per year for the next ten years Anne paid $135,000 for the annuity, and in exchange she will receive $200,000 over the term of the annuity How much of the first $20,000 payment should Anne include in gross income Larry purchased an annuity from an insurance company that promises to pay him $1,500 per month for the rest of his life Larry paid $173,448 for the annuity Larry is in good health, and he is 72 years old Larry received the first annuity payment of $1,500 this month Use the expected number of payments in Exhibit 5 1 for this problem How much of the first payment should Larry include in gross income Lanny and Shirley are divorced in 2018 and do not live together Shirley has custody of their child, Art, and Lanny pays Shirley $22,000 per year All property was divided equally How much should Shirley include in income if Lannys payments drop to $14,000 once Art reaches the age of 18 Grady received $7,200 of Social Security benefits this year Grady also reported salary and interest income this year Grady files married joint and reports salary of $75,000 and interest income of $500 What amount of the benefits must Grady include in his gross income Jimmy has fallen on hard times recently Last year he borrowed $250,000 and added an additional $50,000 of his own funds to purchase $300,000 of undeveloped real estate This year the value of the real estate dropped dramatically and Jimmys lender agreed to reduce the loan amount to $230,000 The real estate is worth $200,000 and Jimmy has $44,000 in other assets but no other liabilities What is the amount Jimmy must include in gross income Fred currently earns $9,000 per month Fred has been offered the chance to transfer for three to five years to an overseas affiliate His employer is willing to pay Fred $9,500 per month if he accepts the assignment Assume that the maximum foreign earned income exclusion for next year is $107,600 How much U S gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year Hal was awarded a $14,000 scholarship to attend State Hotel School All scholarship students must work 20 hours per week at the school residency during the term How much is the taxpayer required to include in gross income Terry was ill for three months and missed work during this period During his illness Terry received $4,000 in sick pay from a disability insurance policy Terry has disability insurance provided by his employer as a nontaxable fringe benefit Terrys employer paid $2,800 in disability premiums for Terry this year What amount is included in Terrys gross income Janus sued Tiny Toys for personal injuries from swallowing a toy Janus was paid $30,000 for medical costs and $240,000 for punitive damages What amounts are included in gross income for the following taxpayers

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Although Hank is retired, he is an excellent handyman and often works part-time on small projects for neighbors and friends. Last week his neighbor, Mike,

Although Hank is retired, he is an excellent handyman and often works part-time on small projects for neighbors and friends. Last week his neighbor, Mike, offered to pay Hank $500 for minor repairs to his house. Hank completed the repairs in December of this year. Hank uses the cash method of accounting and is a calendar-year taxpayer. Mike gave Hank tickets in December to the big game in January. The tickets have a face value of $50 but Hank could sell them for $475. Hank went to the game with his son. What is Hanks gross income for this year?

Louis files as a single taxpayer. In April of this year he received a $900 refund of state income taxes that he paid last year. Last year Louis claimed itemized deductions of $12,700. Louiss itemized deductions included state income taxes paid of $1,750. How much of the refund, if any, must Louis include in gross income? Assume the standard deduction last year was $12,400.

Anne purchased an annuity from an insurance company that promised to pay her $20,000 per year for the next ten years. Anne paid $135,000 for the annuity, and in exchange she will receive $200,000 over the term of the annuity. How much of the first $20,000 payment should Anne include in gross income?

Larry purchased an annuity from an insurance company that promises to pay him $1,500 per month for the rest of his life. Larry paid $173,448 for the annuity. Larry is in good health, and he is 72 years old. Larry received the first annuity payment of $1,500 this month. Use the expected number of payments in Exhibit 5-1 for this problem. How much of the first payment should Larry include in gross income?

Lanny and Shirley are divorced in 2018 and do not live together. Shirley has custody of their child, Art, and Lanny pays Shirley $22,000 per year. All property was divided equally. How much should Shirley include in income if Lannys payments drop to $14,000 once Art reaches the age of 18?

Grady received $7,200 of Social Security benefits this year. Grady also reported salary and interest income this year. Grady files married joint and reports salary of $75,000 and interest income of $500. What amount of the benefits must Grady include in his gross income?

Jimmy has fallen on hard times recently. Last year he borrowed $250,000 and added an additional $50,000 of his own funds to purchase $300,000 of undeveloped real estate. This year the value of the real estate dropped dramatically and Jimmys lender agreed to reduce the loan amount to $230,000. The real estate is worth $200,000 and Jimmy has $44,000 in other assets but no other liabilities. What is the amount Jimmy must include in gross income?

Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $9,500 per month if he accepts the assignment. Assume that the maximum foreign earned income exclusion for next year is $107,600. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year?

Hal was awarded a $14,000 scholarship to attend State Hotel School. All scholarship students must work 20 hours per week at the school residency during the term. How much is the taxpayer required to include in gross income?

Terry was ill for three months and missed work during this period. During his illness Terry received $4,000 in sick pay from a disability insurance policy. Terry has disability insurance provided by his employer as a nontaxable fringe benefit. Terrys employer paid $2,800 in disability premiums for Terry this year. What amount is included in Terrys gross income?

Janus sued Tiny Toys for personal injuries from swallowing a toy. Janus was paid $30,000 for medical costs and $240,000 for punitive damages. What amounts are included in gross income for the following taxpayers?