Question

Doug and Sue Click file a joint tax return and decide to itemize their deductions. The Clicks' income for the year consists of $89,000 in salary, $1,500 interest income, and $700 long-term capital loss. The Clicks' expenses for the year consist of $1,450 investment interest expense. Assuming that the Clicks' marginal tax rate is 35 percent, what is the amount of their investment interest expense deduction for the year

Answer 1

$1,450

Step-by-step explanation:

Interest Income = $1,500

Investment Interest expenses = $1,450

Allowed deduction limit investment interest is subject to investment income. So $1,450 is allowed as deduction