Heather's interest and gains on investments for the current year are as follows:Interest on Madison County school bonds $600Interest on U. S. government bonds 700Interest on a Federal income tax refund 200Gain on the sale of Madison County school bonds 500Heather's adjusted gross income from the above is: or; Heather must report gross income in the amount of:a. $2,000. b. $1,800. c. $1,400. d. $1,300. e. None of these

Question

Ariel Odonnell

Business

23 May, 13:05

Heather's interest and gains on investments for the current year are as follows:Interest on Madison County school bonds $600Interest on U. S. government bonds 700Interest on a Federal income tax refund 200Gain on the sale of Madison County school bonds 500Heather's adjusted gross income from the above is: or; Heather must report gross income in the amount of:a. $2,000. b. $1,800. c. $1,400. d. $1,300. e. None of these

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Easton Cherry · Answer 1

c. $1,400

Explanation:

The computation of the amount which is reported in the gross income is shown below:

= Interest on U. S. government bonds + Interest on a Federal income tax refund + Gain on the sale of Madison County school bonds

= $700 + $200 + $500

= $1,400

The Interest on Madison County school bonds $600 is exempt. So, it is not taxable and thus not included in the gross income.