Starting in 2003, Donald and Bella have been purchasing Series EE bonds in their name to...

Starting in 2003, Donald and Bella have been purchasing Series EE bonds in their name to use for the higher education of their daughter Ashley, who currently is age 21. In 2018, they cash in $9,000 of the bonds to use for tuition, fees, and room and board. Of this amount, $3,000 represents interest. Of the $9,000, $8,100 is used for tuition and fees, and $900 is used for room and board. Donald and Bella's AGI, before the educational savings bond exclusion, is $128,950.

If an amount is zero, enter "0".

a. If Donald and Bella file a joint, how much is the savings bond exclusion?

Round any division to two decimal places and use rounded amount in subsequent computations. If required, round your final answer to the nearest dollar.
$

b. Assume that Donald and Bella purchased the bonds in Ashley's name. Determine the tax consequences for Ashley.

$ of savings bond interest is included in Ashley's gross income.

c. Assume the same facts in part (a) except Donald and Bella file separate returns. Compute the savings bond exclusion.
$

Expert Solution

ekkarill92 answered 2 years ago

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