Each of the Numbered Items Below Is Accorded Only One

question 68

Multiple Choice

Each of the numbered items below is accorded only one of the following lettered treatments. Use the existing law as it applies to the current year, match the best answer to the statements below.
-Katrina receives $1,000 interest income from U.S. Treasury bonds that her uncle had given to her.

• A)Fully excluded from gross income.
• B)Fully included in gross income.
• C)Partially excluded from gross income.

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Definitions:

Maturity Date

The final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.

Bond's Principal

The face value of a bond, which is the amount the issuer agrees to pay the bondholder at the time of maturity, excluding interest payments.

Redemption Date

The specific date at which a bond or other debt instrument can be repaid before its maturity.

Initial Public Offerings

The process by which a private company offers shares to the public in a new stock issuance to raise capital.