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 unior
- $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

The amount that will be reported on Min's Form 1040, Line 2b, is $450. So, the correct answer is c. $450.

Min Lee received the following items of income during the year:

1. Wages: $35,000

2. Dividends from a savings account at her credit union: $150

3. Interest from a U.S. Savings Bond: $200

4. Interest from a Treasury bill: $250

To find the amount that will be reported on Min's Form 1040, Line 2b, we need to focus on the interest income.

Interest income includes the interest earned on savings accounts, bonds, and Treasury bills. In this case, Min received interest from a U.S. Savings Bond ($200) and interest from a Treasury bill ($250).

Total taxable interest income = Interest from U.S. Savings Bond + Interest from Treasury bill

`\[ Total \, taxable \, interest \, income = $200 + $250 = $450 \]`

Therefore, the amount that will be reported on Min's Form 1040, Line 2b, is $450. The correct answer is: c. $450

Answer 2

Min Lee needs to report the sum of interest from a U.S. Savings Bond and interest from a Treasury bill on Form 1040, line 2b, which totals $450. Dividends are not included in this total.

Step-by-step explanation:

The question relates to the reporting of income on a Form 1040, specifically line 2b which is concerned with taxable interest income. Min Lee received several items of income, among which are $150 of dividends from a savings account at her credit union, $200 of interest from a U.S. Savings Bond, and $250 of interest from a Treasury bill.

According to the tax rules, the taxable interest (both from the U.S. Savings Bond and Treasury bill) must be reported on Form 1040, line 2b. The correct amount to report on Min Lee's Form 1040, line 2b would be the sum of the interest amounts which is $200+$250= $450. Dividends are reported separately and do not apply to the interest income total for line 2b. Therefore, the correct answer is c. $450.