For the current tax year, David, a married taxpayer filing a joint return, reported the following: What is the maximum amount that David can deduct in the current year as investment interest expense?

Question

Quizplus · Accepted Answer

The maximum amount that David can deduct as investment interest expense in the current year is $21,000. This is calculated by adding his taxable investment income ($16,000) and his excess investment interest expense ($5,000), which is the amount of investment interest that exceeds his investment income. The limit for investment interest expense deduction is the amount of investment income plus $5,000, which is why David can only deduct up to $21,000.

For the Current Tax Year, David, a Married Taxpayer Filing