In December of This Year,Jake and Stockard,a Married Couple,redeemed Qualified

question 110

Multiple Choice

In December of this year,Jake and Stockard,a married couple,redeemed qualified Series EE U.S.Savings Bonds.The proceeds were used to help pay for their daughter's college tuition.Jake and Stockard received proceeds of $8,000 representing principal of $5,000 and interest of $3,000.The qualified higher educational expenses they paid this year totaled $6,000.Their AGI is below the threshold for phase-out of the exclusion.What is the amount of interest income Jake and Stockard can exclude from their income this year?

• A)$2,250
• B)$2,500
• C)$3,000
• D)$5,000

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Definitions:

Private Enterprise System

An economic system where private individuals or businesses own capital goods and operate with minimal government intervention.

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity of goods demanded, resulting in a stable market condition.

Economic Choices

Decisions made by individuals, firms, or governments regarding the allocation of resources and the distribution of goods and services.

Pure Competition

A market structure characterized by many sellers offering identical products, where no single seller has any influence over market price or conditions.