Question 1: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

In 2021, Evelyn had the following transactions:

Salary $90,000 Short-term capital gain from a stock investment 4,500 Bank loan (proceeds used to buy personal auto) 20,000 Alimony paid (divorce was finalized in 2020) 10,000 Child support paid 7,000 Contribution to traditional IRA 3,000 Inheritance from aunt 40,000

Calculate Evelyn's AGI.

Question 2: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

In 2021, Jenny is single and maintains a home in which she and her dependent cousin live. Jenny cannot claim head of household status.

True or False

Question 3: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Under the income tax formula, a taxpayer must choose between deductions from AGI and the standard deduction.

True or False

Question 4: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Venus, age 16 and single, earns $4,700 in 2021. Her parents can still claim her as a dependent even if she does not live with them.

True or False

Question 5: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Amena sold her investment for a gain of $14,000. She also sold her business use auto for a loss of $6,000. As a result of these sales, $14,000 is subject to income tax.

True or False