1. Wayne, a single taxpayer, purchases a new home valued at $725,000, in 2021, borrowing $625,000 from Century National Bank. He also pays $7,250 in points. During 2021 he pays interest of $71,000 on the loan. He also pays $32,000 in real estate taxes during 2021. Wayne pays state income taxes of $25,000.

What is Wayne's allowable taxes deduction on Schedule A in 2021?

1. $0

2. $10,000

3. $25,000

4. $32,000

5. $57,000

Early in the year, Marlon was in an automobile accident during the course of his employment. As a result of the physical injuries he sustained, he received the following payments during the year:

• Reimbursement of medical expenses Marlon paid by a medical insurance policy he purchased $10,000

• Damage settlement to replace his lost salary $15,000

What is the amount that Marlon must include in gross income for the current year?

1. $25,000

2. $10,000

3. $15,000

4. $0

Randy is the manager of a motel. As a condition of his employment, Randy is required to live in a room on the premises so that he would be there in case of emergencies. Randy would otherwise be required to pay $800 per month rent. The room that Randy occupied normally rented for $70 per night, or $2,100 per month. On the average, 90% of the motel rooms were occupied. As a result of this rent-free use of a room, Randy is required to include in gross income the amount of

1. 0

2. 800

3. 2100

4. 1890