Answer:
True is the correct answer.
Explanation:
Answer:
False is the correct answer.
Explanation:
Answer:
(C) $72,000
Explanation:
The deduction for investment interest is limited to the amount of net investment income reported.
If Ramon elects to treat the net capital gain as investment income for purposes of computing the investment interest expense limitation, the deduction will be $72,000 ($34,500 interest + $37,500 net capital gain). If Ramon elects to include the capital gains as investment income, his $37,500 net capital gain will not qualify for beneficial alternative tax rate treatment.
Therefore, he must decide between the tax benefit of an additional deduction of $37,500 versus the benefit of the reduced tax rates applicable to net capital gain.
