a) John, age 60, purchases an annuity from an insurance company for $90,000. He is to receive $500 per month for life. How much income must he recognize in the current year? b) Emma, age 33 is single and has no dependents. She earned $ 40,000 this year before she was fired for poor job performance. Emma subsequently received $3,000 this year in damages from a personal injury action. Prior to her firing, she injured her back upon lifting a file cabinet and received $5,000 in worker’s compensation. How much should Emma include in her gross income?

Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son, Jorge, from his previous marriage. Diana works as a computer programmer at Datafile Incorporated (DI) earning a salary of $96,000. Ryan is self- employed and runs a day care center. The Workmans reported the following financial information pertaining to their activities during the current year. a. Diana earned a $96,000 salary for the year. b. Diana borrowed $12,000 from Dl to purchase a car. DI charged her 2 percent interest ($240) on the loan, which Diana paid on December 31. DI would have charged Diana $720 if interest had been calculated at the applicable federal interest rate Assume that tax avoidance was not a motive for the loan. c. Ryan received $2,000 in alimony and $4,500 in child support payments from his former spouse. They divorced in 2016. d. Ryan won a $900 cash prize at his church-sponsored Bingo game. e. The Workmans received $500 of interest from corporate bonds and $250 of…

This year (2022), Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $74,400 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses as follows: Cost of moving his possessions to the city (125 miles away) $ 1,200 Interest paid on accumulated student loans 2,940 Cost of purchasing a delivery uniform 1,540 Cash contribution to State University deliveryman program 1,370 Calculate Evan's AGI and taxable income if he files single. Assume that interest payments were initially required on Evan's student loans this year.

Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce Lawyers Association (ADLA), a professional organization for divorce attorneys. The membership dues for the ADLA are $750 per year and must be paid at the beginning of each year. For instance, membership dues for the first year are paid today, and dues for the second year are payable one year from today. However, the ADLA also has an option for members to buy a lifetime membership today for $8,000 and never have to pay annual membership dues. years, it's Obviously, the lifetime membership isn't a good deal if you only remain a member for a couple of years, but if you remain a member for 40 a great deal. Suppose that the appropriate annual interest rate is 7.9%. What is the minimum number of years that Lloyd must remain a member of the ADLA so that the lifetime membership is cheaper (on a present value basis) than paying $750 in annual membership dues? (Note: Round your answer up to the…