In February 2015, Paul and Jean, a married couple, cashed a qualified Series EE savings bond they bought in November 2004. They received proceeds of $7,132, representing principal of $5,000 and interest of $2,132. In 2015, they helped pay their daughter's college tuition. The qualified education expenses they paid in 2015 totaled $4,000. They are not claiming an education credit for the expenses, and they do not have an education IRA. How much interest income can Paul and Jean exclude?

In February 2015, Paul and Jean, a married couple, cashed a qualified Series EE savings bond they bought in November 2004. They received proceeds of $7,132, representing principal of $5,000 and interest of $2,132. In 2015, they helped pay their daughter's college tuition. The qualified education expenses they paid in 2015 totaled $4,000. They are not claiming an education credit for the expenses, and they do not have an education IRA. How much interest income can Paul and Jean exclude?

In February 2015, Paul and Jean, a married couple, cashed a qualified Series EE savings bond they bought in November 2004. They received proceeds of $7,132, representing principal of $5,000 and interest of $2,132. In 2015, they helped pay their daughter's college tuition. The qualified education expenses they paid in 2015 totaled $4,000. They are not claiming an education credit for the expenses, and they do not have an education IRA. How much interest income can Paul and Jean exclude?



A. 2132
B. 4000
C. 1196
D. 1000




Answer: C


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