mike received the following interest payments this year. what amount must mike include in his gross income…

mike received the following interest payments this year. what amount must mike include in his gross income (for federal tax purposes)?\nbond\tinterest\ngeneral motors\t$ 1,550\ncity of new york\t1,000\nstate of new jersey\t1,300\nu.s. treasury\t950\nmultiple choice\n$2,850\n$2,550\n$2,250\n$2,500

mike received the following interest payments this year. what amount must mike include in his gross income (for federal tax purposes)?\nbond\tinterest\ngeneral motors\t$ 1,550\ncity of new york\t1,000\nstate of new jersey\t1,300\nu.s. treasury\t950\nmultiple choice\n$2,850\n$2,550\n$2,250\n$2,500

Answer

Explanation:

Step1: Identify taxable interest

Interest from state and local - government bonds (City of New York and State of New Jersey) is generally tax - exempt for federal tax purposes. Interest from corporate (General Motors) and U.S. Treasury bonds is taxable.

Step2: Calculate taxable interest amount

The taxable interest amounts are from General Motors ($1,550) and U.S. Treasury ($950). Add these amounts: $1550 + 950=2500$.

Answer:

$2,500$