Assuming a Taxpayer Qualifies for the Exclusion Treatment, the Interest

question 21

Multiple Choice

Assuming a taxpayer qualifies for the exclusion treatment, the interest income on educational savings bonds:

• A)Is gross income to the person who purchased the bond in the year the interest is earned.
• B)Is gross income to the student in the year the interest is earned.
• C)Is included in the student's gross income in the year the savings bonds are sold or redeemed to pay educational expenses.
• D)Is not included in anyone's gross income if the proceeds are used to pay college tuition.
• E)None of the above.

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Definitions:

Heuristic

This term refers to a practical approach to problem-solving, learning, or discovery that employs a practical method not guaranteed to be optimal but sufficient for reaching an immediate goal.