Answer the following questions by writing a memo to each of the clients below. You must include proper PRIMARY source references to support your response (Hint - make sure they are current). You may either use footnotes at the end of each paragraph, or endnotes to show your sources. For each of the first four items, determine if the taxpayer has economic income, and if so whether it must be included in gross income (remember to identify the primary authority that supports your position). 1. Jerome discovered a gold nugget (valued at $12,000 ) on his land. 2. Jason embezled $25,000 from his employer and has not yet been apprehended. 3. Kandi found $1,000 inside an old dresser she purchased at the flea market. No one has claimed the money. 4. Devon owns 1,000 shares of stock worth $10,000. This year he received 200 additional shares of this stock from a stock dividend. His 1,200 shares are now worth $12,500. Must Devon include the dividend paid in stock in income? 5. Karyn loaned $22,000 to a co-worker to begin a new business in 2018 (written documentation is available for the loan). If the co-worker declares bankruptcy on May 31 th of the current year can Karyn deduct the bad debt loss this year? If she can deduct it what is the character of the loss? 6. Peggy is a rodeo clown. This year she expended $1,000 on "funny" clothes and outfits. Under what circumstances (if any) can Peggy deduct the cost of the clown clothes? 7. Andre claims his mother (Sophia) as a qualifying dependent. Sophia is filing her own return to get back money withheld for federal taxes. Is Sophia entitled to an addition to the standard deduction if she is 66