2
QuizMultiple Choice

Income Taxes — Quiz

Question 2 • Financial Math

Which type of income is taxable?

Answer
A
an inheritance from a grandparent
B
interest from a municipal bond
C
a gift from a friend
D
interest from a savings account

Explanation

Interest earned in a savings account is generally taxable income and must be reported. Municipal bond interest is usually exempt from federal income tax, while an inheritance and a gift are generally not taxable income to the person receiving them. The correct choice is interest from a savings account.

AI-written and checked against the verified answer.

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