When Jim's father passes away and leaves him a substantial inheritance, Jim's siblings sue to have Jim declared incompetent and his inheritance placed in an account that the brother will have control of. In court, Louie and Alex speak in Jim's behalf, but to no avail. Jim later feels better when he plays a tape of "You Are the Sunshine of My Life" that his father left for him.
In this episode, we learn that Alex can be a compulsive gambler. Alex even scares Louie off with his compulsion, but Jim talks some sense into Alex at the end (after having bankrolled him initially).
Latka is sent to rescue a female cabbie who is stranded in a snowstorm, but he breaks down as he reaches her. The two are freezing in her cab and decide to make love in order to avoid freezing to death. They survive and are rescued but Latka feels tremendous guilt and Simka realizes he's been unfaithful (despite the circumstances) before he can even tell her. Latka and Simka seek the guidance of their minister, who says to set things right, Simka must sleep with someone Latka works with. (Continued in part two)
Alex, who loves the theater, takes a part time job as a gofer for a young producer and director, but soon feels mistreated by his younger bosses. Louie, spying on Alex at his new job, spots Alex being humiliated and uncharacteristically does not make fun of him; rather, he tries to convince Alex to stand up for himself and tell the director off. Alex is considering this when the director suddenly has a change of heart and apologizes for mistreating Alex and ignoring one of his earlier suggestions. As a result, Alex regains his dignity.
Louie gets a call from Emily, who jilted him in an earlier episode, who is drunk and drugged and wants to meet him at a nearby bar. Louie decides to go over there to throw a drink in her face and reject her, therefore getting the last laugh. However, when he gets to the bar, Emily serenades him and has Louie eating out of her hands. The next morning, she is shocked to see him wake up next to her, but Louie somehow convinces her that they are meant for each other. They begin a relationship but it becomes evident that Louie has become Emily's slave and he's starting to hate himself for it. Eventually she comes to a realization of what she's doing to him and breaks it off with Louie, who is relieved, but he finally exacts revenge by throwing orange juice in her face.
Latka and Simka introduce Elaine to a friend of theirs visiting from their country named Zifka. Zifka is a monk who has taken a vow of silence but during his vacation is allowed a week (every ten years) to experience all worldly pleasures. He and Elaine quickly fall in love (seemingly to Alex's dismay) but Zifka must resume his silence when his week ends right before he can tell Elaine exactly how he feels about her. Elaine is saddened but understanding, and lets Zifka go.
Zena comes to the garage and announces she's getting married and asks the gang to let Louie know that she wants to speak with him. After telling Louie, he becomes convinced that she wants to get back together, and he meets her for dinner. Louie is crushed when she tells him she's getting married and wants him to attend, and he reacts very insultingly toward her. The rest of the gang goes to the wedding when Louie refuses, but afterwards he regrets not going and wishing her well, so he crashes his way on to their cruise ship (about to leave on their honeymoon). Zena and her husband are not happy to see Louie and before he can wish them well, Louie has a change of heart and starts choking the husband. After composing himself, however, he wishes them well, and Zena seems touched.
Alex's ex-wife, Phyllis, depressed and lonely, comes to see Alex, who takes pity on her and includes her in his holiday plans. This turns ugly, when she manages to bring the whole gang down with her self-pity. Her Christmas present to Alex is that she won't bug him for New Year's, which turns out to be the best gift she could give him.
Louie decides to buy a luxury co-op apartment with some help on the down payment from the newly wealthy Jim. Unfortunately, Louie first has to convince a snooty co-op board that he is right for their building (as he comes in, they are rejecting actress Penny Marshall because they don't approve of the actress lifestyle). Bringing Alex for support, Louie has his work cut out for him when he sees that the board is bigoted. Alex goes on a tirade against their discriminatory process, and the board accepts Louie just to spite Alex.
When Elaine's son, Jason, watched Tony coaching youth boxing, he wants to get involved. Alex and Tony talk Elaine into letting Jason box, despite her better judgement. In Jason's first bout, he gets knocked out by the first punch and Elaine holds Alex responsible. Fortunately, Elaine forgives Alex eventually and Jason doesn't want to box again.
Part two of a two part clip show featuring highlights of Taxi.
Diane, an old friend of Jim's comes to the garage looking for Jim, and Alex takes a liking to her. Alex makes some less than flattering remarks about Jim, not realizing that she and Jim have begun a romantic relationship. When Jim confronts Alex about the things he said, Alex justifies his comments with examples of crazy things that Jim has done. Jim is touched that Alex remembered all those things about him and all is well.
Elaine is seriously dating the nerdy Arnie, also introduced in the Shloogel Show episode earlier this season, and decides it's time for him to meet her kids although she isn't sure if that's a great idea. Arnie is also very worried about the meeting and when he meets them, he tries a little too hard to make him their favorite person. In the process, he gives them presents and even money, to Elaine's dismay. In an effort to set things right, Arnie tells the kids that he didn't mean to try to buy their affection and it turns out they still like him. Elaine then realizes that now that the kids like Arnie so much, she's pretty much stuck with him-- but she's pleased about this.
Tony is depressed when he learns his girlfriend, Vicki (also introduced in the "Shloogel Show" episode) is pregnant. He decides to "do the right thing" and marry her, although when he talks to her, he's clearly not too thrilled about it. As a result, she storms off and later refuses to take his calls. This makes Tony's mood even worse, but meanwhile he has scored a crucial boxing match with a ranked contender. Unfortunately, his heart isn't in it and during the match, he initially gets knocked down then he gets up but just seems to be going through the motions. Midway through the bout, his manager somehow inspires him and Tony appears to turn the fight around. As the decision is being announced, Vicki appears and they aggressively talk things out. Just as the bout his been awarded to Tony's opponent on a split decision, Vicki agrees to marry Tony, who throws his hands in victory, despite having lost the fight.
Newly wealthy Jim gives each of the gang $1000 to give away, in an effort to teach them how good it feels to give someone else $1000. Latka & Simka give the money to their minister, who protests loudly (as is their custom) but accepts the money nonetheless. Tony uses the money to buy his friend Walt a large TV set. Elaine (inexplicably) gives the money to her daughter, suggesting that she split it with her brother. Louie gives the money to Jeff, who won't accept Louie's "dirty money" until he learns it was from Jim. Alex has trouble finding someone to give the money to until he comes accross an old lady in his cab with seven kids.