In 2022, Aurora received a $25,000 bonus computed as a percentage of profits. In 2023, Aurora's employer determined that the 2022 profits had been incorrectly computed, and Aurora had to refund the $8,000 in 2023. Assume that Aurora was in the 35% tax bracket in 2022 but in the 12% bracket in 2023.

If required, round your final answers to the nearest dollar.

a. In 2022, how much is Aurora required to include in gross income?

$______________

b. In 2023, what is the amount of the deduction Aurora can claim?

$________________

c.What is the reduction in taxes for 2023 as a result of the deduction?

$__________