Question

29). In December of this year, Sam and Esterina, a married couple, redeemed qualified Series EE U.S. Savings Bonds. The proceeds were used to help pay for their daughter's college tuition. Sam and Esterina received proceeds of $12,000 representing principal of $9,000 and interest of $3,000. The qualified higher educational expenses they paid this year totaled $9,000. Their AGI is for 2018 is $129,550. What is the amount of interest income Sam and Esterina can exclude from their income this year?

A) $1,000

B) $1,500

C) $2,750

D) $3,000

30) In December 2018, Tatiana, a cash-basis taxpayer, rents an apartment to Hakeem. Tatiana receives both the first and last months' rent totaling $2,000 plus a security deposit of $500. The amount of income reported by Max as taxable in 2018 is

A) $400.

B) $1,000.

C) $2,000.

D) $2,500.

31) Miguel and Maria are married. Miguel’s salary is $70,000. His tax withholding is $10,000. Maria’s salary is $80,000. Her tax withholding is $12,000. They have itemized deductions of $30,000. If they file Married Filing Joint for 2018, what is their tax refund or tax amount that is

owed to the IRS?

1. Owe $3,231 in tax.
2. Owe $3,538 in tax
3. Have a refund of $3,721
4. Have a refund of $4,042.

Answer 1

Question 29:

Step 1: Calculate the Total Amount of Interest Exclusion

As per the applicable rules, if the total value of redemption (principal + interest) is greater than the amount of qualified educational expenses, the amount of interest that can be excluded is calculated on a pro-rata basis as below:

Total Interest Exclusion = Interest Amount*(Qualified Educational Expenses)/Total Redemption Proceeds

Substituting values in the above formula, we get,

Total Interest Exclusion = 3,000*(9,000)/12,000 = $2,250

_____

Step 2: Calculate the Phaseout Reduction of Interest Amount

The phaseout reduction of interest amount is determined as below:

Phaseout Reduction = Interest Amount*(AGI +Interest Amount - Phaseout Threshold for 2018)/Phaseout Range

Substituting values in the above formula, we get,

Phaseout Reduction = 3,000*(129,550 + 3,000 - 119,300)/(149,300 - 119,300) = $1,325

_____

Step 3: Calculate Interest Income Excludable from Year's Income

The value of interest income excludable from year's income is arrived as below:

Interest Income Excludable from Year's Income = Total Interest Exclusion - Phaseout Reduction = 2,250 - 1,325 = $925 which is closed to $1,000 (which is Option A)

Answer is $1,000.

30 ) :-

The correct answer is Option ( C ) . $2,000

Explanation :-

A security store is certifiably not an assessable until definite statement . it's anything but an assessable except if non refundable or until the occupant moved out and all or part of the store isn't came back to the inhabitant . lease is assessable when is gotten .