This year Seth had investment royalty income of $31,000, investment expenses of $28,000, and a long-term capital gain of $8,000 on an investment.In calculating his net investment income for the current year, Seth may deduct a maximum of $11,000 of investment interest.

Question

Quizplus · Accepted Answer

Net investment income is calculated by subtracting investment expenses from investment income. Seth's net investment income is $31,000 (royalty income) + $8,000 (capital gain) - $28,000 (expenses) = $11,000. Therefore, he can deduct up to $11,000 of investment interest.

This Year Seth Had Investment Royalty Income of $31,000, Investment