Question

Mr. and Mrs. Beck are full-year residents of California. During the tax year, they had income as follows:

- $22,000 wages earned in CA.
- $540 interest from a CA bank.
- $210 interest from an OR bank.
- $800 interest from OR muni bonds.
- $150 interest from US savings bonds.
- $1800 Interest from an installment sales contract (from the sale of their OR residence when they moved to CA).
How much of the above income is subject to OR tax?
a. $0.
b. $210.
c. $1800.
d. $2010.

Answer 1

Only the $210 interest from the Oregon bank is subject to Oregon state tax because it is sourced from within Oregon.

Step-by-step explanation:

The question requires an understanding of state taxation on various types of income. Since Mr. and Mrs. Beck are full-year residents of California, they are subject to California state tax on all of their income. However, the question specifically asks about what income is subject to Oregon (OR) state tax.

Generally, states do not tax income earned by non-residents unless it is sourced from within the state. This means that the wages earned in California, interest from a California bank, interest from the Oregon municipal bonds, interest from US savings bonds, and interest from an installment sales contract would not be subject to Oregon state tax.

The only income that would be subject to Oregon state tax is the $210 interest from the Oregon bank, as that is income sourced from within Oregon.

Therefore, the correct answer is:
b. $210.