Question

Ted pays​ $2,100 interest on his automobile​ loan, $120 interest on a loan to purchase a computer for personal​ use, $630 interest on credit​ cards, and​ $1,100 investment interest expense. ted has net investment income of​ $850. ted's deductible interest is

Answer 1

Answer:

A. $850

Explanation:

The answer is net investment income of $850. This is because the investment interest expense to the extent of net investment income is deductible. The others listed are not deducted. The net investment income can either be capital gains, interest or dividends. When the expenses is less than net investment income, all investment interest expense is deductible and when interest expense is more than investment income, only expenses up to net investment income amount is deducted.

Answer 2

Answer:

The net Investment income is $850

Explanation:

Given that,

Ted pays $2100 interest loan for automobile

purchased a computer for personal use = $120

interest on credit cards = $630

Investment interest  expense = $1100

Ted net investment income of $850.

This is true, because the  interest expense of the investment  to the  net investment income is deducted. The others things listed are not deducted.

The net investment income can either be interest, dividends, or capital gains,  when  the interest expense is higher  than investment income, only expenses up to net investment income amount is deducted.When the expenses is lower or lesser than net investment income, the  investment interest expense is deductible.