For 2016,Jorge,a single father,reported the following amounts relating to his investments: Net investment income from interest $ 7,000 Interest expense on a loan to purchase stocks 2,000 Interest expense on funds borrowed in 2015 to purchase land for investment 6,000
What is the maximum amount that Jorge can deduct in 2016 as investment interest expense?
A)$6,000.
B)$7,000.
C)$8,000.
D)$2,000.

Question

Quizplus · Accepted Answer

Jorge can deduct his net investment income (in this case, $7,000) plus any investment interest expense that exceeds his net investment income, up to a maximum of $8,000.

So, in this case, his investment interest expense is $2,000 + $6,000 = $8,000. Since that is equal to the maximum allowable deduction, the answer is C) $8,000.

For 2016,Jorge,a Single Father,reported the Following Amounts Relating to His