Ward and June Are in the 28% Tax Bracket

question 142

Multiple Choice

Ward and June are in the 28% tax bracket.Included in their assets is a Dell Corporation bond with a face value of $10,000.The bond pays $1,000 a year in interest.Ward and June make a gift to their son,Wally (age 19) of the $1,000 in interest income.Wally is in the 10% tax bracket.What is Ward and June's tax liability related to the bond and the bond interest for the current year?

• A)$-0-
• B)$100
• C)$280
• D)$1,000
• E)$2,800

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