Question

Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2019:

Home acquisition debt interest	$	10,500
Credit card interest		3,200
Home equity loan interest (used for home improvement)		5,210
Investment interest expense		8,400

Required:

With 2019 net investment income of $1,050, calculate the amount of their allowable deduction for investment interest expense and their total deduction for allowable interest. Home acquisition principal, and the home equity loan principal combined are less than $750,000.

Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2019:

Home acquisition debt interest	$	10,500
Credit card interest		3,200
Home equity loan interest (used for home improvement)		5,210
Investment interest expense		8,400

Required:

With 2019 net investment income of $1,050, calculate the amount of their allowable deduction for investment interest expense and their total deduction for allowable interest. Home acquisition principal, and the home equity loan principal combined are less than $750,000.

a. Deduction for investment interest expense

b. Total deduction for allowable interest before any phase-out limits

Answer 1

ANSWER

1).

Deduction for investment interest expense = $ 1050

Explanation :-

Deduction for investment interest expense is limited to the net investment income of $ 1050 given in the above question.

2).

Particulars	Amount ($)
Investment interest expense Home aquisition debt interest Home equity loan interest	1050 10500   5210
Total amount of deduction for allowable interest	$16,760

Total amount of deduction for allowable interest = $ 16,760.

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