Answer:
amount of taxable interest income that Karen report for 2018 = 0
Amortization per year = $100
Adjusted basis  = $ 10,900
Explanation:
given data 
face value = $10,000
purchased the bond = $11,000
interest rate = 4%
solution
we know here that City of Richmond bonds that is tax exempted
so that amount of taxable interest income that Karen report for 2018 = 0
and 
as Premium on the bond is 
Premium on the bond = purchased the bond - face value 
Premium on the bond  = 11,000 - 10,000 = 1,000
and here time Period = 10 years  ( January 1, 2018 to December 31, 2027 )
so Amortization per year is 
Amortization per year = 
Amortization per year = $100
so
Adjusted basis will be = Purchase price - Premium amortized 
Adjusted basis = 11,000 - 100 
Adjusted basis  = $ 10,900