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2 February, 18:15

In the current year, Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense. What is the maximum amount of investment interest expense she is allowed to deduct this year?

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  1. 2 February, 18:21
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    The maximum amount of investment interest expense she is allowed to deduct this year is $9,000.

    Explanation:

    An investment interest expense is deductible to the extent of net investment income earned during the year.

    $9,000 deductible this year; $5,000 carried forward to next year

    Therefore, The maximum amount of investment interest expense she is allowed to deduct this year is $9,000.
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