Chad pays $2,000 of interest on $20,000 of debt incurred for the purchase of municipal bonds and corporate bonds. Chad receives $800 of interest on the municipal bonds and $800 of interest on the corporate bonds. What is his allowable deduction on the $2,000 of interest? Explain your answer and show all calculations.

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The Answer of Chad pays $2,000 of interest on $20,000 of debt incurred for the purchase of municipal bonds and corporate bonds. Chad receives $800 of interest on the municipal bonds and $800 of interest on the corporate bonds. What is his allowable deduction on the $2,000 of interest? Explain your answer and show all calculations.

Chad Pays $2,000 of Interest on $20,000 of Debt Incurred