Bender borrows $200,000 from his uncle's bank and invests the proceeds in various corporate bonds. He pays $9,000 in interest on the loan during the current year. Bender reports investment income of $7,500 in the current year. How much of the interest expense is deductible by Bender?

Question

Quizplus · Accepted Answer

Bender can deduct interest expense up to the amount of his investment income, which is $7,500.

Bender Borrows $200,000 from His Uncle's Bank and Invests the Proceeds