The year is 2020 (e.g., references to "this year" refer to 2020). All individuals mentioned are US citizens, are younger than 65 and are not blind. All locations are within the United States. In all cases, MACRS depreciation (double-declining balance) is taken rather than an expensing option (section 179 expensing or bonus depreciation). All tax calculations should be based on the 2020 Tax Rate Schedules. Figures should be rounded to the nearest dollar. Percentages should be rounded to the nearest whole percentage (e.g., 32% instead of 32.2%).

1. Property tax. Peggy-Sue owns her principal residence and also owns rental property. She paid no income tax or sales tax (lucky her!). She paid $3,000 property tax on her residence and $4,000 property tax on the rental property. How much are her for AGI and itemized deductions for property taxes.

A. $7,000 "for AGI"

B. $7,000 itemized

C. $3,000 "for AGI"; $4,000 itemized

D. $4,000 "for AGI"; $3,000 itemized

2. Stock transactions. On February 1, 2016, Roddy purchased 400 shares of Golf Co. common stock for $8,000 total. On July 1, 2020, Roddy purchased an additional 200 shares of the stock for $3,000 total. On July 5, 2020, Roddy sold all 400 of the shares he had bought in 2016 for $4,000 total. How much loss does Roddy recognize on the July 5 sale?

3. Depreciation. For his business as a general contractor, Joao made a single asset purchase last year. He paid $40,000 for a light general-purpose truck on December 10 of that year and immediately placed it in service. He has continued to use the truck throughout this year. How much depreciation should he claim this year?

4. Inheritances. Jonathons mother Emma passed away on March 3, 2018, and Jonathon inherited an antique piano that had been in the family for generations. Nobody in the family knows how much was originally paid for the piano. Emma had the piano fully restored in 2008, but she did not keep records of the restoration costs. An appraiser determined that the value of the piano on March 3, 2018, was $15,500. On January 15, 2019, Jonathon found an especially avid collector of pianos who offered to pay him $19,000 for the piano. Jonathon took the offer. How much capital gain must Jonathon report in 2019 and is it long-term or short-term?

A. $19,000 short-term capital gain

B. $19,000 long-term capital gain

C. $3,500 short-term capital gain

D. $3,500 long-term capital gain

5. Gifts. On April 6, 2019, Begonia gave her niece Orchid a beautiful silver dinnerware set that she had bought in 1979 for $1,800. As the price of silver has fallen significantly since that time, the dinnerware set was only worth $1,200 at the time of the gift. There was an uptick in silver prices in November of 2019 and Orchid needed cash, so she sold the dinnerware set on November 10, 2019, for $1,400. How much capital gain must Orchid report in 2019 and is it long-term or short-term?

$400 long-term capital loss

A. $200 long-term capital gain

B. No gain or loss

C. $400 short-term capital loss

D. $200 short-term capital gain