Question

Interview Notes

• Mark and Barbara are married and want to file a joint return.

• Mark retired and began receiving retirement income on March 1, 2017 . No distributions were received prior to his retirement . Mark selected a joint survivor annuity for these payments . The plan cost at annuity start date was $14,500 . Mark has already recovered $1,029 of his cost in the plan .

• The Matthews received a $125 state income tax refund from their 2018 state tax return . The Matthews do not have enough deductions to itemize for 2019 and they have never itemized deductions .

• Mark and Barbara stated if they are entitled to a refund, they want half of it deposited into their checking account and the other half deposited into their savings account . The checking account number is 123456789 and the savings account number is 987654321 . Both accounts are from Adelphi Bank and Trust .

CORRECTED checked . . . Adelphi Bank and Trust 8020 Yankers Blvd YOUR CITY, STATE ZIP 2019 Interest Income 1000 INT Copy 34-7XXXXXX 317-00-xxxx MARK MATTHEWS 742 RED ROOSTER YOUR CITY, STATE ZIP for your records

22. The correct amount of taxable interest on Form 1040 is $300.

True False

Answer 1

Answer : TRUE

Box 1. Interest Income Enter taxable interest not included in box 3. Include amounts of $10 or more, whether or not designated as interest, that are paid or credited to the person's account by savings and loan associations, mutual savings banks not having capital stock represented by shares, building and loan associations, cooperative banks, homestead associations, credit unions, or similar organizations. Include interest on bank deposits, accumulated dividends paid by a life insurance company, indebtedness (including bonds, debentures, notes, and certificates other than those of the U.S. Treasury) issued in registered form or of a type offered to the public, or amounts from which you withheld federal income tax or foreign tax. In addition, report interest of $10 or more attributable to a TIH of a WHFIT, or accrued by a real estate mortgage investment conduit (REMIC), a financial asset securitization investment trust (FASIT) regular interest holder, or paid to a collateralized debt obligation (CDO) holder, as explained later.

Box 11.

If you are required to report the amount of bond premium amortization allocable to an interest payment, you may report either (1) a net amount of interest that reflects the offset of the interest payment by the amount of bond premium amortization allocable to the interest payment, or (2) a gross amount for both the interest payment and the bond premium amortization allocable to the interest payment. For example, if a taxpayer receives $20 of taxable interest from a corporate bond and the amount of bond premium amortization allocable to the interest is $2, you may report $18 of interest income in box 1 and $0 in box 11, or you may report $20 of interest income in box 1 and $2 in box 11.