Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 40

Eighty percent of the Willigs' AGI comes from their submarine sandwich shop operated as a sole proprietorship. In 2014, the Willigs lost an IRS audit and owed $12,000 in 2012 federal income taxes, all attributable to inventory computations in their business. Interest on this amount totaled $3,200. All amounts due were paid by the end of 2014. How much of the interest can the Willigs deduct on their 2014 Schedule C