Question

Holly inherited $10,000 of City of Atlanta bonds in February. In March, she received interest of $500, and in April she sold the bonds at a $200 gain. Holly redeemed Series EE U.S. savings bonds that she had purchased several years ago. The accumulated interest totaled $800. Holly received $300 of interest on bonds issued by the City of Quebec, Canada. What amount, if any, of gross income must Holly report?

Answer 1

Answer:

Given data,

City of Atlanta bonds in February(Holly inherited)= 10000

Received interest = 500

She sold the bonds to gain the amount =200

The accumulated interest = 800

Holly received interest on bonds issued by the City of Quebec, Canada = 300

Consider we know that

Gross income = received interest + accumulated interest

=$500 + $800

= $1,300

Thus,

Hence gross income $1,300 must holly report.