In the Current Year, Julia Earns $9,000 in Net Investment

question 1179

Multiple Choice

In the current year, Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense. What is the maximum amount of investment interest expense she is allowed to deduct this year?

• A) $3,000 deductible this year; $11,000 carried forward to next year
• B) $9,000 deductible this year; $5,000 carried forward to next year
• C) $14,000 deductible this year; nothing to be carried forward to next year
• D) $0

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Definitions:

Posture

The way in which someone holds their body when standing or sitting, often reflecting confidence, attitude, or current state of health.

Vocal Intonations

The variation in pitch while speaking, which can affect the meaning, emotion, or emphasis conveyed by the speaker.

Intrusive Rock

An igneous rock that solidified from magma below Earth’s surface; synonym: plutonic rock.

Extrusive Rock

An igneous rock that forms when magma is erupted onto Earth’s surface; synonymous with volcanic rock.