Question

1. Heather's interest and gains on investments for the tax year are below. What is her...

1. Heather's interest and gains on investments for the tax year are below. What is her gross income from these investments? Interest on U.S. government bonds: $500 Interest on Bland County school bonds: $900 Interest on a Virginia income tax refund: $100 Gain on the sale of Bland County:

$1000 A. $1,500 B. $1,600 C. $2,000 D. $2,500

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Answer #1

correct option is "B"-1600

Interest on U.S. government bonds (Taxable ) 500
Interest on Bland County school bonds Tax exempt
Interest on a Virginia income tax refund (Taxable) 100
Gain on the sale of Bland County 1000
Gross income 1600

**Municipal bonds (Bland County school bonds ) are tax exempt however those who buy such bonds in secondary market and later sold them ,then any gain arising is taxable.

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