Mike received the following interest payments this year.What amount must Mike include in his gross income (for federal tax purposes)? $\begin{array}{ll}
\text { Bond }&\text { Interest. }\
\text { General Motors}&\$1,450 \
\text { City of New York}&900 \
\text { State of New Jersey}&1,200 \
\text { U.S. Treasury}&850
\end{array}$

Question

Quizplus · Accepted Answer

Interest from municipal bonds (City of New York and State of New Jersey) is generally exempt from federal income tax. Therefore, Mike should include only the interest from General Motors and U.S. Treasury bonds in his gross income, totaling $1,450 + $850 = $2,300.

Mike Received the Following Interest Payments This Year A)$2,650 B)$2,350 C)$2,050 D)$2,300 E)$3,500

Mike Received the Following Interest Payments This Year A)$2,650
B)$2,350
C)$2,050
D)$2,300
E)$3,500