Starting in 2000, Sergio and Jasmine have been purchasing Series EE bonds in their name to use
Question:
Starting in 2000, Sergio and Jasmine have been purchasing Series EE bonds in their name to use for the higher education of their son, Devon, who currently is age 20.
In 2016, they cash in $24,000 of the bonds to use for tuition, fees, and room and board. Of this amount, $10,000 represents interest.
Of the $24,000, $19,200 is used for tuition and fees, and $4,800 is used for room and board.
Total Bond encashed | $ 24,000 |
used for tuition and fees | $ 19,200 |
used for room and board | $ 4,800 |
Sergio and Jasmine's AGI, before the educational savings bond exclusion, is $130,000. Review Section 135, and answer the following questions. If an amount is zero, enter "0".
a) If Sergio and Jasmine file a joint, how much is the savings bond exclusion? (Round any division to three decimal places and use rounded amount in subsequent computations. If required, round your final answer to the nearest dollar. $)
b). Assume that Sergio and Jasmine purchased the bonds in Devon's name. Determine the tax consequences for Devon. Savings bond interest is included in Devon's gross income.
South Western Federal Taxation 2015
ISBN: 9781305310810
38th edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young