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Compute Kunto gross income from the certificate

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Reference no: EM132628180

Problem - On January 1, 2019, Kunto, a cash basis taxpayer, pays $46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives $50,000. In your computations:

Required -

a. Compute Kunto's gross income from the certificate for 2019. Round any amounts to the nearest dollar.

b. Compute Kunto's gross income from the certificate for 2020. Round any amounts to the nearest dollar.

Reference no: EM132628180

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