Tracy invested in the following stocks and bonds during 2016.
Blue,Inc.
$25,000
City of Falcon bonds
75,000
To finance the investments,she borrowed $100,000 from Swan Bank.Interest expense paid on the loan during 2016 was $5,000.During 2016,Tracy received $1,250 of dividend income from Blue,Inc.and $3,000 of interest income on the municipal bonds.
a.Determine the amount of Tracy's gross income.
b.Determine the maximum amount of Tracy's deductible interest expense.

Question

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The Answer of Tracy invested in the following stocks and bonds during 2016.
Blue,Inc.
$25,000
City of Falcon bonds
75,000
To finance the investments,she borrowed $100,000 from Swan Bank.Interest expense paid on the loan during 2016 was $5,000.During 2016,Tracy received $1,250 of dividend income from Blue,Inc.and $3,000 of interest income on the municipal bonds.
a.Determine the amount of Tracy's gross income.
b.Determine the maximum amount of Tracy's deductible interest expense.

Tracy Invested in the Following Stocks and Bonds During 2016