1. In 2020, Marvin, a single, cash basis taxpayer itemized his deductions as follows:

   Mortgage interest $12,000

   State income tax $4,000

   Real estate tax $5,000

   Total $21,000

   In April of 2021, Marvin received a $500 refund of his state taxes.

   The standard deduction for single filers in 2020 was $12,400.

   Marvin must include the $500 refund in his gross income for 2021.

   True

   False

2. Michael was awarded an academic scholarship to ODU in the amount of $15,000 in 2020. Michael's college exepenses for 2020 were:

   Tuition: $11,000

   Books $1,500

   Room and Board $6,000

   Michael must include $2,500 in his gross income in 2020.

   True

   False

3. Adrian purchased an insurance policy in the face amount of $50,000 upon the life of Sharona and subsequently transfers the policy to Wayne for $15,000. Over the years, Wayne pays subsequent premiums of $2,000 on the policy. Upon Sharona's death, Wayne receives the proceeds of $50,000. Wayne is required to include $35,000 in his gross income.

   True

   False

4. Jerry conducts an activity in 2021 that is classified as a hobby and produces the following revenues and expenses:

   Revenue	$20,000
   Property taxes	3,000
   Utilities	1,000
   Advertising	3,000
   Insurance	750

   Determine how much income Jerry must report and the amount of expenses he can deduct assuming he itemizes his deductions.

   		Income 0, expenses 0
   		Income $25,000, expenses $7,750
   		Income $20,000, expenses 0
   		Income $20,000. expenses $3,000