Brenda Has $15,000 in U

question 102

Multiple Choice

Brenda has $15,000 in U.S. Series EE saving bonds and she is considering whether to cash the bonds. Under what conditions can Brenda exclude the interest on the savings bonds from her gross income?

• A) Brenda can exclude the interest if she uses the proceeds to pay for college tuition.
• B) Brenda's modified AGI must be below a phase-out range for the exclusion.
• C) The proceeds must be used for higher education expenses of Brenda, her spouse, or Brenda's dependent.
• D) All of these are necessary conditions for Brenda to exclude the interest.
• E) None of these - the interest is always included in gross income

---

Definitions:

Corporation

A legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Corporations can enter contracts, sue and be sued, and pay taxes apart from their owners.

Secondary Market

The marketplace where investors buy and sell securities they already own, as opposed to the primary market where securities are first issued.

Private Placement

The sale of securities directly to institutional investors or individuals, bypassing the public markets.

IPO

Initial Public Offering, the process by which a private company offers its shares to the public for the first time.