1. Samuel, married to John, with two children as dependents, has 2020 wages of $60,000, paid alimony of $3,000 pursuant to divorce decree from 2015 with his former spouse Mary- and has taxable exempt interest income of $8,000, and a $22,000 0%/15%/20% net long-term capital gain. John doesnt work (stays home with the two kids, both were under age 13 in 2020). The couple cant itemize (they rent) and take the standard deduction. Sam is age 38. Josh 36. What is the 2020 taxable income ? Ignore any tax credits but please compute their tax due for 2020.

2. Larry was the holder of a patent on a video game. During 2020, he licensed all substantial rights to make, use and sell using the patent to GAMECO. He is to receive a 5% royalty on the purchasers first $10,000,000 of sales each year related to the product in which the patent is incorporated. The non-exclusive license is to last 10 years. Larry had not reduced the patent to practice. He had a $50,000 basis for the patent. During 2020, he received $200,000 in royalties, based on GAMECOs sales of $4 million. What is the nature and amount of Larrys income associated with this patent?