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24 September, 12:28

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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  1. 24 September, 16:19
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    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.
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