For 2017,Miram,a single mother,reported the following amounts relating to her investments: $\begin{array}{lr}
\text {Net investment income from interest }&\$7,000\
\text { Interest expense on a loan to purchase stocks}&2,000\\text {Interest expense on funds borrowed in 2016 to purchase land for investment \ }&6,000\
\end{array}$
What is the maximum amount that Miriam can deduct in 2017 as investment interest expense?
A)$8,000.
B)$2,000.
C)$6,000.
D)$7,000.

Question

For 2017,Miram,a single mother,reported the following amounts relating to her investments: $\begin{array}{lr}
\text {Net investment income from interest }&\$7,000\
\text { Interest expense on a loan to purchase stocks}&2,000\\text {Interest expense on funds borrowed in 2016 to purchase land for investment \ }&6,000\
\end{array}$
 What is the maximum amount that Miriam can deduct in 2017 as investment interest expense?
A)$8,000.
B)$2,000.
C)$6,000.
D)$7,000.

Quizplus · Accepted Answer

The maximum amount of investment interest expense that Miriam can deduct in 2017 is $8,000. This is because the total amount of investment interest expense that she incurred in 2017 is $8,000 ($2,000 + $6,000), and the maximum amount of investment interest expense that she can deduct is equal to the amount of her net investment income, which is $7,000.

For 2017,Miram,a Single Mother,reported the Following Amounts Relating to Her