Question

1. Elmer received the following distributions from Virginiana Mutual Fund for the calendar year 2018:

   Ordinary dividends	$250
   Capital gain distributions	$170
   Nontaxable distributions	$80

   Elsie, Elmer's wife, did not own any of the Virginiana Mutual Fund shares, but she did receive $1,475 in interest on a savings account at the Moss National Bank and $175 in interest on California Municipal Bonds. Elmer and Elsie filed a joint income tax return for 2018. What amount is reportable as taxable interest income?

   	a.	$1,475
   	b.	$175
   	c.	$0
   	d.	None of the above
   	e.	$1,650

1 points   

QUESTION 5

1. Marie had a good year. She received the following prizes and awards:

   - an iPad from The Famous Daytime Talk Show with a fair market value of $500

   - lottery winnings of $1,000 received in cash

   - a plaque worth $25 plus $100 of Godiva chocolate in recognition for 100 days on the job without an accident

   - a $10,000 cash prize from American Idol

   How much of her prizes and awards should Marie report on her tax return?

   	a.	$11,500; the award from her job is excluded
   	b.	$11,600; the plaque may be excluded
   	c.	$11,625; everything is included at the highest amount
   	d.	$11,000; only cash prizes and awards are included
   	e.	None, they are all excluded from income

Answer 1

1)Answer :$1,475

Explanation :$175 interest on California Municipal Bonds is not a taxable income.

2)Answer :$11,500; the award from her job is excluded

Explanation :Prizes and awards to be reported on her tax return=500+1000+10000=11500.

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