Question

Sally received $50,000 of compensation from her employer and she received $400 interest from a corporate bond. What is the amount of Sally's gross income from these items?
A) $400
B) $50,000
C) $50,400

Answer 1

Answer:

C) $50,400

Explanation:

If Sally received $50,000 of compensation from her employer and she received $400 interest from a corporate bond, then the amount of Sally's gross income from these items is $50,400

Sally's income taxable is not only her employment compensation but also the interest she earns from a corporate bond is subject to income tax.