• Sam, age 45, saved diligently for his college education by putting part of his pay into U.S. Series EE saving bonds. Sam purchased the bonds for $6,500, and this year he redeemed the bonds for $7,200. He has no other income this year. What amount must Sam include in his gross income?
• A.A maximum of $350 if Sam uses the proceeds to pay for his college tuition and fees.
• B.$6,500.
• C.$700 unless Sam uses at least some portion of the proceeds to pay for his college tuition and fees.
• D.$7,200.
• E.Zero- proceeds from cashing bonds sold at a discount is not realized income.