Steve, age 38, spent the first six months of the current year working as a financial planner for Question Capital Management. He took a new job out-of-state with Investments, a financial planning firm. He feels as though he can become a partner at the new firm within five years. His only regret is that he was required to move from Texas, his home state, to Vermont. Steve had the following items of income and loss in the current year:

Salary (combined for both jobs): $60,000 Long-term capital loss: $500 Short-term capital loss: $4,500 Qualified moving expenses (paid by Steve): $4,000

1. What is Steves adjusted gross income for the current year?

$51,500

$52,000

$53,000 $56,000

2. Bonnie, a widow, elected to receive the proceeds of a $100,000 face value insurance policy on the life of her deceased husband in ten annual installments of $11,900 each including interest (beginning last year). In the current year, she received $11,900, which included $1,900 interest. Bonnie dies in December of the current year after collecting the current years payment. What is the amount subject to income tax on her final tax return?

$0

$1,900

$5,000

$6,900