Jack and Diane (two American kids from the heartland) were married in 2020 on November 8. Jack is a lawyer with a local law firm. Diane is a school teacher, teaching the 3rd grade at a local public elementary school. During the year, they had the following items for their income:

a) Salary for Jack: $200,000

b) Salary for Diane: $65,000

c) Jack received a bonus for performance of $5,000

d) Dividend income of $3000, $2700 of which was received from US companies and $300 from a corporation located in the Cayman islands

e) $4000 from the city of Fairfax for purchase of the bonds used to fund a high school library

f) During 2020, Jack was in a car crash and was compensated $3000 for car injuries and $8,000 for lost wages due to being in the hospital for 2 weeks

g) In 2020, Diane sold some investments listed in her IRA for a total gain of $4,000

h) Jack had stock losses of $15,000 in 2019 and $7,000 carried over into 2020. Jack had no capital gains or losses in 2020.

i) Jack contributed $5000 to a traditional IRA

j) Diane is a part owner of land, which discovered oil in 1997. From this, she receives royalties of $1500 per year

1. What is the total income reported on Line 9 of Schedule 1, Part I? (please show work)

2. What is the total deduction allowed for the IRA contribution? (please show work)

3. How are the dividends taxed? (please show work)

4. How would the bonds be handled differently if they were for a school library in London, England?