Question

Heather's interest and gains on investments for the current year are as follows:

Interest on Madison County school bonds $600
Interest on U.S. government bonds 700
Interest on a Federal income tax refund 200
Gain on the sale of Madison County school bonds 500

Heather'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.

Answer 1

c. $1,400

Step-by-step explanation:

Gross income

= 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

Therefore, Heather must report gross income in the amount of $1,400.