Sherry, whose filing status is head of household, paid state income taxes in 2015 totaling $3, 500. On her 2015 federal income tax return, her itemized deductions totaled $9, 500. In 2016, Sherry files her 2015 state income tax return and receives a $1, 100 refund. a. Sherry includes $0 in her 2016 gross income. b. Sherry must include $200 in her 2016 gross income. c. Sherry must include $250 in her 2016 gross income. d. Sherry must include $ 1, 100 in her 2016 gross income. e. Sherry must amend her 2015 Federal income tax return to reduce itemized deductions by $ 1, 100. During recent years, Kanye and Kim, who file a joint return, have been purchasing Series EE bonds in their name to use for the higher education of their son, North, who is currently age 18. During the current year, they redeem $10,000 of the bonds to use for North's freshman year expenses. Of the $10,000 redeemed, $4,000 represents interest. They use $7,000 for tuition and fees, while the other $3,000 is used for room and board. Assuming that their adjusted gross income is $122, 300 in 2016, how much of the $10,000 withdrawal do Kanye and Kim have to include in 2016 taxable income? a. $1, 200. b. $1, 760. c. $2, 040. d. $3,000. e. $3, 440