Question

John (45) and Cynthia (46) are married, and they will file a joint return. During the year, they earned investment income consisting of: $200 interest income from a savings account with their local bank, reported on Form 1099-INT. $350 interest income from a certificate of deposit held with another local bank, reported on Form 1099-INT. $100 in dividends from a savings account with a local credit union, reported on Form 1099-INT. $250 interest income from a U.S. Treasury note, reported on Form 1099-INT. $500 tax-exempt interest income from a municipal bond investment, reported on Form 1099-INT. $1,700 in ordinary dividends from a mutual fund investment, reported on Form 1099-DIV. Complete John and Cynthia's Schedule B (Form 1040), Interest and Ordinary Dividends.

Answer 1

Calculation of Net taxable income

Particulars Amount Amount

Interest income from savings interest $200

Interest income from certificate deposit $350

Dividend from saving account with $100

local credit union

Interest income from us treasury note $250

Tax exempt interest from municipality bond $500

Ordinary dividend $1,700

Gross total income $3,100

Income exempt

Dividend from saving account $100

Dividend from treasury note $250

Tax exempt interest from municipality bond $500 $850

Net taxable income $2,250