Question

Chen incurred $ 58, 500 of interest expense this year related to his investments. His investment income includes $ 15,000 of interest,$ 9,000 of qualifted dividends, and a $ 22,500 net capital gain on the sale of securities. The maximum amount of Chen's Investinent interest expense deduction for the year is:_________.
a. $ 16,000
b. $ 24,000
c. $ 37,500
d. $ 46,500
e. None of these

Answer 1

Answer:

d. $ 46,500

Explanation:

Particulars                 Amount         Remarks

Interest income         $15,000          Given

Qualified dividends   $9,000           Given

Net capital gain         $22,500         Given

Total                           $46,500

The maximum amount of Chen's Investment interest expense deduction for the year is $46,500