Which of the following production of income expenses would be deductible:
I.Interest expense on loan to acquire U.S. Treasury notes.
II.Interest expense on loan to acquire IBM Corporate bonds.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Which of the following production of income expenses would be deductible:
I.Interest expense on loan to acquire U.S. Treasury notes.
II.Interest expense on loan to acquire IBM Corporate bonds.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

Both interest expenses on loans to acquire U.S. Treasury notes and IBM Corporate bonds are deductible as production of income expenses. This is because they are investments that generate income for the taxpayer, and the interest expense incurred in acquiring these investments is therefore considered a deductible expense.

Which of the Following Production of Income Expenses Would Be