On January 5,2011,Jane purchased a bond paying interest at 6% for $30,000.On September 30,2011,she gave the bond to Tim.The bond pays $1,800 interest on December 31.Jane and Tim are cash basis taxpayers.When Tim collects the interest in December 2011:
A) Jane must include all of the interest in her gross income.
B) Tim must include all of the interest in his gross income.
C) Jane reports $450 of interest income in 2011, and Tim reports $1,350 of interest income in 2011.
D) Jane reports $1,350 of interest income in 2011, and Tim reports $450 of interest income in 2011.
E) None of the above is correct.
Correct Answer:
Verified
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