Marnie purchased a bond on August $15,2016$ for $$2,100.$ $$200$ of the purchase price represented accrued interest. She received $$210$ in interest income on the bond on December $1,2016.$ What is the proper treatment of the $$210$ interest income for federal income tax purposes?

Question $18$ options:

$1)$

$$200$ return of capital, the $$10$ can be currently included as interest income or deferred until the bond is cashed.

$2)$

Marnie can elect to include the $$210$ as interest income in $2016$ or defer the reporting until she cashes the bond.

$3)$

$$210$ taxable as interest income.

$4)$

Report the total payment as taxable interest, then report $$200$ as an adjustment to income.