Danny Nawrocki purchased an annuity for $120,000. The annuity pays $18,000 a year for 10 years. How much of each payment must Danny include as gross income? Kathy Zvinakis sold a piece of rental property for $200,000 and paid the real estate agent $8,000 in fees. She purchased the property for $180,000 several years ago and deducted $40,000 of depreciation on her tax returns over her years of ownership. What gain should Kathy recognize on the sale? Last year, Noor reported $13,500 in itemized deductions including $6,500 of state income taxes paid (his standard deduction was $12,550). In March of this year, Noor received a $2,000 refund of the state income taxes paid last year. How much of the refund should be included in Noor's gross income this year? Jake Thornton sold stock for $20,000 that he had purchased for $26,000 several years prior in a regular investing account. Jake also received $1,000 in dividends from Stock ABC held in a regular account and $2,500 in dividends from Stock XYZ held in a qualified retirement account. How do these items affect his taxable income for the year (clearly indicate + or -): Ordinary Income: Income taxed at preferential rate: