Question: Question 1 Interest from which source is usually tax-exempt on the federal return? A. Certificate of deposit. B. Corporate bond. C. Municipal bond. D. U.S.

Question 1

Interest from which source is usually tax-exempt on the federal return?

A. Certificate of deposit.

B. Corporate bond.

C. Municipal bond.

D. U.S. Treasury obligations.

Question 2

Sansa opened a savings account in 2020 and deposited $8,000. She received $200 of interest on the account in 2021, but did not withdraw the money. What year does Sansa include the interest income on her tax return?

A. Interest income is never taxable.

B. 2020, the year she deposited the money.

C. 2021, the year she earned the interest.

D. She does not pay tax on the interest until she withdraws the money.

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