1. Marlene a cash basis taxpayer purchases a CD on July 1, 2016 for $10,000. The CD matures on June 30, 2018 and will pay $10,816, thus yielding a 4% annual return. How much income (if any) will she report on her 2016 and 2017 tax return? a) Nothing as all of interest is paid in 2018. 2016 = $200 ($10,000 x .04 x 1/2 year) and 2017 = $408 0.04 ($10,000 + 200). 2016 = $816 and 2017 = SO. d) None of the above