McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 47

Cecil cashed in a Series EE savings bond with a redemption value of $14,000 and an original cost of $9,800.For each of the following independent scenarios, calculate the amount of interest Cecil will include in his gross income assuming he files as a single taxpayer:
a.Cecil plans to spend all of the proceeds to pay his tuition at State University and estimates his modified adjusted gross income at $63,100.
b.Cecil plans to spend $4,200 of the proceeds to pay his tuition at State University and estimates his modified adjusted gross income at $60,600.