Ramon incurs $55,400 of interest expense this year related to his investments.His investment income includes $23,000 of interest and a $25,000 net capital gain on the sale of securities.Ramon has asked you to compute the amount of his deduction for investment interest,taking into consideration any options he might have.The maximum amount of Ramon's investment interest expense deduction for the year is:

Question

Quizplus · Accepted Answer

The maximum amount of Ramon's investment interest expense deduction is the lesser of his investment income ($23,000) or his investment interest expense ($55,400). Therefore, Ramon can deduct a maximum of $23,000 for investment interest expense.

Ramon Incurs $55,400 of Interest Expense This Year Related to His