1. Your mother purchased a $200,000 life insurance policy many years ago. Over the life of the plan she pays $50,000 in premiums. She dies in the current year and you are approached by the company to take either $25,000 for 10 years or a cash value of $170,000. How are your taxes affected in the current year if you choose the cash value?

2. You have both a scholarship and receive money from a 529 plan. Your tuition is $14,000. Your fees are $1200. You spend $1500 on books. You pay $2,500 to UT for a food plan. You pay $3,000 to UT for staying in the dorms. UT requires you to live on campus. What is the total qualified education expenses related to the scholarship?

3.You have both a scholarship and receive money from a 529 plan. Your tuition is $14,000. Your fees are $1200. You spend $1500 on books. You pay $2,500 to UT for a food plan. You pay $3,000 to UT for staying in the dorms. UT requires you to live on campus. What is the total qualified education expenses related to the 529 plan?

4. McDonalds serves you very hot coffee. You burn your tongue. Everything now tastes bitter. A doctor says the burning is the cause of this. You get depressed because you no longer enjoy food. You sue McDonalds. You have $25,000 in doctor bills, lab reports, and surgery. You have $10,000 in bills from seeking therapy regarding your depression. The court awards you $50,000 to cover your bills. Any excess was charged to punish McDonalds. How much of this is taxable?