On January 5, 2010, Jane purchased a bond paying interest at 6% for $30,000. On September 30, 2010, she gave the bond to Tim. The bond pays $1,800 interest on December 31. Jane and Tim are cash basis taxpayers. When Tim collects the interest in December 2010:
a) Jane must include all of the interest in her gross income.
b) Tim must include all of the interest in his gross income.
c) Jane reports $450 of interest income in 2010, and Tim reports $1,350 of interest income in 2010.
d) Jane reports $1,350 of interest income in 2010, and Tim reports $450 of interest income in 2010.
e) None of the above is correct.