TCOs 1 2 3 and 5 George an unmarried cash basis taxpayer rec

(TCOs 1, 2, 3, and 5) George, an unmarried cash basis taxpayer, received the following amounts during the year:

 

Interest on savings accounts

  $2,400

Original issue discount on a certificate of deposit purchased on July 1, 2010, and matured on June 30, 2011

  $1,200

Dividends on USG common stock

  $200

Interest on U.S. government bonds

  $300

Interest on City of Radford school bonds

  $600

What amount should George report as gross income from dividends and interest for the year?

$4,700

$4,100

$3,800

$3,600

None of the above

 

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Solution

Interest on savings accounts 2400 Original issue discount on a certificate of deposit 1200 Dividends on USG common stock 200 Interest on U.S. government bonds 300 Gross income from dividends and interest 4100 Option 2 is correct