Question

Jing, who is single, paid educational expenses of $16,000 in 2020. He redeemed Series EE bonds...

Jing, who is single, paid educational expenses of $16,000 in 2020. He redeemed Series EE bonds and received principal of $8,000 and interest of $3,000. Jing has other adjusted gross income of $86,350. With respect to the $3,000 of bond interest, Jing must include in taxable income?.

A. $3,000
B. $1,600
C. $0
D. $1,400
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Homework Answers

Answer #1

Answer: option A

Explanation

The interest received from a series EE bond is taxed when the bond is redeemed or disposed off, unless the owner of the bond elects to have it taxed annually.

The interest income received is subjected to federal income tax.

In the above question,

Jing has redeemed the bond and received principal of 8000 and interest of 3000.

Therefore Jing should include 3000 as interest received in his taxable income.

SUMMARY

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