Q1: Hansen bought his primary residence on 1/1/2010 for $400,000. He put $50,000 of his own money as the down payment, and borrowed $350,000 from a bank for the remainder of the purchase price. On 1/1/2021, he was laid off from his job, and he could not make his mortgage payments. On 3/30/2021, the bank foreclosed on the house, and took the house back from Hansen. On 3/30/2021, the house was worth $150,000, and he owed $300,000 to the bank. The bank sold the house for $150,000 which the bank used to pay off half of the $300,000 that Hansen owed. The bank forgave the remaining $150,000 that Hansen owed the bank, pursuant to the foreclosure. In 2021, how much taxable income does Hansen recognize from the bank forgiving the home loan to Hansen?

a. $0

b.$150,000

c. $300,000

d. $400,000

Q2. Diamelle purchased a life insurance policy on her life, and named Eric, her husband, as the beneficiary. Diamelle paid $50,000 for the life insurance policy. Upon Diamelles death, the life insurance policy would pay $2,000,000 to Eric. On 6/30/20X1, Diamelle died. On 8/30/20X1, the insurance company paid Eric $2,000,000 pursuant to the life insurance policy. How much of the insurance policy payment does Eric include in his taxable income in 20X1?

a. $0

b. $50,000

c. $1,950,000

d. $2,000,000

Q3. On 3/30/20X1, Rynn received a gift of $1,000,000 in cash from her father Matthew. How much taxable income from the $1,000,000 gift does Rynn include in her Federal taxable income in 20X1?

a. $0

b. $250,000

c. $500,000

d. $1,000,000