Question
Johnny has various investments. He earns interest and dividends on a certificate of deposit (CD), a savings account, mutual funds, corporate stocks, and corporate bonds.
Johnny has various investments. He earns interest and dividends on a certificate of deposit (CD), a savings account, mutual funds, corporate stocks, and corporate bonds. Johnny files his tax returns using the cash method. The interest on the CD is rolled into a new CD with the old principal. He receives the interest from the corporate bonds and savings account on a semi-annual basis. The earnings from the mutual funds are not distributed and are used to purchase additional shares. The dividends from the corporate stocks are reinvested. What income does Johnny have to report for the current year?
A. Corporate stock and mutual fund dividends.
B. Corporate bond and savings account interest.
C. Savings account and CD interest.
D. All of the answers are correct.
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