This year Seth had investment income of $31,000, investment expenses of $28,000, and a long-term capital gain of $8,000 on an investment. In calculating his net investment income for the current year, Seth may deduct a maximum of $11,000 investment interest.

Question

Quizplus · Accepted Answer

Seth's net investment income is $31,000 (investment income) + $8,000 (long-term capital gain) = $39,000. He can deduct investment expenses up to the amount of his investment income, which is $28,000. Therefore, the maximum investment interest he can deduct is $39,000 - $28,000 = $11,000.

This Year Seth Had Investment Income of $31,000, Investment Expenses