Chris P. Bacon was born in 1954, while his wife, Sida Bacon, was born in 1958. Neither of them are blind. During the year, they provided more than 50% of the support for these individuals:

Hamilton Burger is their son, age 24, who lived with them the entire year, while he was a full-time student in college. Hamilton also earned $5,000 during the year while working at a fast-food restaurant.

Jim Shu is Sida's cousin, and he lived with the Bacons the entire year, except for the entire month of August when he lived with his friend in Lake Tahoe. Jim Shu is age 23, and earned $2,900 as a fitness instructor.

The Bacons present the following information for 2022:

Self-employment income (net): $129,288 Ordinary dividends: $822 (qualified, $282)

Short-term capital gains: $6,712

Pass-through income from an -corporation: $6,549

Lottery winnings (net of purchase price): $2,899

One-half of self-employment taxes paid: $9,134

Mortgage interest paid: $15,832

Property taxes paid: $11,754

On September 1, 2022, Chris P. Bacon also began receiving monthly payments of $1,220 from an annuity. He had purchased the annuity many years ago for $272,426 with the expectation he would receive 290 monthly payments.

QUESTIONS: 1. Will any of the named individuals qualify as the Bacon's dependent? Why or why not? (Make sure to address each potential dependent.)

2. How much of the annuity Chris P. Bacon received will be included as part of their income in 2022?

3. What is the Bacon's 2022 taxable income?