14. Cash basis taxpayers may choose to recognize interest on United States Savings Bonds each year as it accrues.

True or False

15. Clark, a 12-year-old child, lives with his parents. During the current year, Clark earned $2,400 delivering newspapers. This was his only income. Clark's parents file a joint return and claim Clark as a dependent. Considering this information, which of the following statements is correct?

A. The parents must report Clark's income on their tax return. B. Clark must use his parents' tax rate to compute his tax liability. C. Clark's taxable income is $1,350. D. Clark's taxable income is $0. E. None of the above. 16. Brian, a calendar-year taxpayer, purchased an annuity contract which started paying him $54 each month on June 1 of the current year. The annuity cost him $2,400, and it has an expected return of $7,200. How much of this annuity is includable in gross income for the current year? A. $0 B. $378 C. $126 D. $252 E. None of the above