1. Ariel has worked for Sander Corporation for 30 years. Sander has a pension plan in which it matches employee contributions by up to 5% of the employee's salary. Ariel retires during the current year when she is 66 years old. Her pension plan contains payments and earnings of $300,000, half of which are attributable to payments made by Ariel and half attributable to payments made by Sander. Under the plan, Ariel is to receive $2,000 per month until she dies.

2. Ikleberry is a self-employed fisherman. He buys a health insurance policy by donating 1,000 salmon filets to the Nordisk Insurance Company's annual Christmas party. During the year, Ikleberry receives $321 in reimbursements from the plan.

3. Salina is an apartment manager and is paid $6,000 per year. The owner of the apart- ments offered her the option of a $300-per-month living allowance or the use of an apartment rent-free. Salina chose to live in the apartment, which normally rents for
$400 per month.

4. Taki was injured in an airplane crash. He sues the airline and receives $4,400 for his pain and suffering, $3,300 for lost wages while he recuperated from his injuries, and $7,000 in punitive damages. He also uses $1,000 from his Medical Savings Account to pay for medical expenses related to the crash. Taki had deposited $1,400 in the account during the year.

5. Sonya purchases a house for $65,000. The seller had listed the house for sale at $80,000 but got into financial trouble and had to accept Sonya's $65,000 offer to avoid bankruptcy.