Question

Will received the following interest and dividend payments this year. What amount should Will
include in his federal gross income?
 City of Greenwood bond interest $1,200
 U.S. Treasury bond interest 500
 State of Kentucky bond interest 1,000
 Mutual Corporation bond interest 600
 Sale of Kentucky bond for a profit of 200
What amount should Will include in his gross income?
a. Zero
b. 1,100
c. 1,300
d. 2,200
e. 3,500

Answer 1

HERE ANSWER IS C $1300

WILL WOULD INCLUDE $1300 IN HIS INCOME AS

income from U.S. Treasury bond interest 500,Mutual Corporation bond interest 600 and Sale of Kentucky bond for a profit of 200 are taxable under federal tax

whereas income from City of Greenwood bond interest $1,200 and State of Kentucky bond interest $1,000 is exempt from federal tax

so taxable income= income from U.S.Treasury bond interest+Mutual Corporation bond interest+Sale of Kentucky bond for a profit

=$600+$500+$200

=$1300