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1. This year, Barney and Betty sold their home (sales price $510,000; cost $140,000). All closing costs were paid by the buyer. Barney and Betty owned and lived in their home for 18 months. Assuming no unusual or hardship circumstances apply, how much of the gain is included in gross income?Multiple Choice

a. $370,000

b. $180,000

c. $170,000

d. $30,000

e. None of the choices are correct.

2. Acme published a story about Paul, and as a result Paul sued Acme for damage to his reputation, emotional distress, and punitive damages. Paul won an award of $30,750 for damages, $7,850 for emotional distress, and $67,000 for punitive damages. What amount must Paul include in his gross income?Multiple Choice

a. $7,850

b. $30,750

c. $67,000

d. $97,750

e. All of these benefits are included in gross income

3. Karl works at Moe's grocery. This year Karl was paid $49,000 in salary, but he was allowed to purchase his groceries at 5 percent below Moe's cost. This year Karl spent $5,890 to purchase groceries, costing Moe $6,200. The groceries were worth $9,300. What amount must Karl include in his gross income?Multiple Choice

a. $54,890

b. $55,200

c. $58,300

d. $49,310

e. $51,500

4. Frank received the following benefits from his employer this year. What amount must Frank include in his gross income?Top of FormMultiple Choice

Benefits Received	Amount
Salary	$ 76,000
Health insurance	6,700
Group-term life insurance (face $50,000)	2,310

a. $76,000

b. $82,700

c. $78,310

d. $85,010

e. $0 - these benefits are excluded from gross income

5. Shaun is a student who has received an academic scholarship to State University. The scholarship paid $20,000 for tuition, $3,350 for fees, and $1,360 for books. In addition, Shaun's dormitory fees of $11,700 were paid by the university when he agreed to counsel freshman on campus living. What amount must Shaun include in his gross income?Multiple Choice

a. $13,060

b. $15,050

c. $3,350

d. $11,700

e. $0none of these benefits are included in gross income.

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