Final answer:
Interest expense on rental property is not considered a deductible investment expense subject to the 2% AGI floor, as it is usually fully deductible against rental income and not subject to the same limitations as other investment-related expenses.
Step-by-step explanation:
The expense that is NOT considered a deductible investment expense subject to the 2% of Adjusted Gross Income (AGI) floor is the interest expense on rental property. Investment expenses that are subject to the 2% floor typically include expenses incurred to produce or collect income that generates taxable income. These expenses typically include costs such as subscriptions to investment-related publications, investment advisory fees, and safe-deposit box fees. Interest expenses on rental properties are generally treated differently. They are often fully deductible against rental income as rental expenses, rather than being subjected to the 2% AGI floor like other investment-related expenses.