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Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur...

Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $2,075 in investment expenses. They also incur $3,125 of investment interest expense during the year. The Porters’ income for the year consists of $151,500 in salary and $2,605 of interest income.


a. What is the amount of the Porters’ investment interest expense deduction for the year?

investment interest expense deduction:

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Answer #1

Answer:

Calculate the Porters Investment Interest expense deduction for the year as show below:

In the present scenario, net investment interest income is $2605. Interest expense is deductibl to the exent of investment income. Thus out of the total interest expense of $3125 the net investment interest income of $2605 will be deductible in the current year and $520 = (3125-2605) will be carried forward to the next year

hence Investment interest Expense $2605 will be deducted

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