Question

In the current year, Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense. What is the maximum amount of investment interest expense she is allowed to deduct this year?

Answer 1

The maximum amount of investment interest expense she is allowed to deduct this year is $9,000.

Step-by-step explanation:

An investment interest expense is deductible to the extent of net investment income earned during the year.

$9,000 deductible this year; $5,000 carried forward to next year

Therefore, The maximum amount of investment interest expense she is allowed to deduct this year is $9,000.