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Donny and Marie, former tag-team mud wrestlers, earned the following interest from their investments during...

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Accounting

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Donny and Marie, former tag-team mud wrestlers, earned the following interest from their investments during the current year: How much interest income must Donny and Marie include on their joint tax return in the current year? A. $1, 250 B. $2, 600 C. $2, 075 D. $1, 325 During Year 1, Mr. Bob, a cash-basis taxpayer, was involved in a lawsuit with Corporation T over the amount T owed him for accounting fees. The court decided in Bob's favor and ordered T to pay him $10,000 without restriction immediately. Bob received the $10,000 in Year 1, and Corporation T immediately appealed the case. In Year 2, the appellate court upheld the lower court's decision. Which of the following is the proper way for Mr. Bob to handle the $10,000 for income tax purposes? A. Report the $10,000 in Year 2 because the case was appealed and he might have had to pay it back. B. Include the $10,000 in income in Year 1. C. Not report the $10,000 as income since it resulted from a lawsuit and is nontaxable. D. Include the $10,000 in income in either Year 1 or Year 2

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