Question

Charles and Marcia are married, cash-basis taxpayers. In Year 2, they had interest income as follows: $500 interest on federal income tax refund $600 interest on state income tax refund $800 interest on federal government obligations $1,000 interest on state government obligations What amount of interest income is taxable on Charles and Marcia's Year 2 joint income tax return?

Answer 1

$1900

Step-by-step explanation:

Calculation to determine What amount of interest income is taxable on Charles and Marcia's Year 2 joint income tax return

Using this formula

Taxable interest income=Interest on federal income tax refund+Interest on state income tax refund+Interest on federal government

Let plug in the formula

Taxable interest income=$500 +$600+$800

Taxable interest income=$1,900

Therefore the amount of interest income that is taxable on Charles and Marcia's Year 2 joint income tax return is $1,900