Question

Min lee received the following items of income during the year: • $35,000 of wages. • $150 of dividends from a savings account at her credit union. • $200 of interest from a U.S. Savings Bond. • $250 of interest from a Treasury bill. What amount will be reported on Min's Form 1040, line 2b? a) $350 b) $400 c) $450 d) $600

Answer 1

Min Lee will report a total of $450 on Form 1040, line 2b, which is the sum of $200 of interest from a U.S. Savings Bond and $250 of interest from a Treasury bill.

Step-by-step explanation:

The student's question regarding Min Lee's income and what amount will be reported on Form 1040, line 2b relates to tax filing and reporting of taxable interest income. Based on the items of income received, the relevant incomes for Form 1040, line 2b, which reports taxable interest, are:

• $200 of interest from a U.S. Savings Bond.
• $250 of interest from a Treasury bill.

Dividends from a savings account are reported separately and wages do not count as interest. Therefore, Min Lee would report the total interest income received:

$200 (from U.S. Savings Bond) + $250 (from Treasury bill) = $450.

The correct answer to the question "What amount will be reported on Min's Form 1040, line 2b?" is (c) $450.