Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of
Question:
Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of deposit (CDs). Determine the tax consequences of the following on her 2022 gross income:
a. On September 30, 2022, she cashed in Series EE bonds for $10,000. She purchased the bonds in 2012 for $7,090. The yield to maturity on the bonds was 3.5%.
b. On July 1, 2021, she purchased a 24-month CD for $10,000. The CD matures on June 30, 2023, and will pay $10,816, yielding a 4% annual return.
c. On July 1, 2022, she purchased a 12-month CD for $10,000. The maturity date on the CD was June 30, 2023, when Marlene will receive $10,300.
Step by Step Answer:
South Western Federal Taxation 2023 Comprehensive Volume
ISBN: 9780357719688
46th Edition
Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young