. This question will test your ability to read and interpret statutory and administrative law. Do a citation search to find Internal Revenue Code Section 108(f)(5) and Notice 2022-1 and use them to answer this question. Jenny, who graduated from college in 2019, had taken out $600,000 in student loan. Under the loan agreement, Jenny must begin making payments in the amount of $10,000 each year beginning in 2020 (2020 2025). Assume in each of these years, the lender forgives $10,000 of the debt. How much of the $60,000 of loan forgiveness will be taxable to Jenny over this six-year period? Assume that IRC 108(f)(5) is the only debt relief provision that could possibility apply to Jennys students loans.

a. $60,000.

b. Zero.

c. $10,000.

10. This question will test your ability to read and interpret statutory law. Do a citation search to find Internal Revenue Code Section 25A(f)(1) (A), IRC 25A(f)(1)(A), and use it to answer this question. Marlena is a full-time student at the University of Louisville. Her tuition for the year is $12,000, which is paid by Marlenas mother, Debbie. Marlena pays all of her own expenses except for tuition. As a result, Marlena does not qualify as Debbies dependent. Can Debbie claim the American Opportunity Credit Education credit on her own tax return for the payment she made for Marlenas tuition?

a. No, because Marlena is not Debbies dependent.

b. Yes, because Marlena is Debbies child even though she is not Debbies dependent.

c. Only if Marlena does not file a tax return for the same year.

11. This question will test your ability to use the slash (/) command in structuring keyword searches. To answer this question, do a keyword search in the Federal Tax Coordinator Client Letters area of Checkpoint. Use the following search: basis /5 "inherited property. Assume your great-uncle Richard owns stock worth $5,000,000. Richard purchased the stock many years ago for $500. This year Richard dies and you inherit the stock. You would like to know what your tax consequences will be if you immediately sell the stock for $5,000,000, e.g., will you have $4,999,500 of gain because your basis in the stock is only $500, or zero gain because your basis in the stock is $5,000,000. What amount of gain will you have and what is the title of the client letter you found to answer this question?

a. $4,999,500; 2157 Inherited property; basis rules.

b. Zero; 2157 Inherited property; basis rules.

c. $4,999,500; 2120 Inherited property; basis rules. s. Zero; 2120 Inherited property; basis rules.

12. Refer to Question #11 above but assume that your great-uncle Richard decides to gift you the stock while he is still alive. How much gain will you have if you immediately sell the stock as soon as you receive it?

a. a. $4,999,500.

b. Zero.