Brandon and Jane Forte File a Joint Tax Return and Decide

question 96

Multiple Choice

Brandon and Jane Forte file a joint tax return and decide to itemize their deductions. The Forte's income for the year consists of $120,000 in salary, $1,000 interest income, $1,500 nonqualifying dividends, and $1,000 long-term capital gains. The Forte's expenses for the year consist of $3,000 investment interest expense and $900 tax preparation fees. Assuming that the Forte's marginal tax rate is 30%, what is the amount of investment interest expense deduction for the year?

• A) Zero; investment interest expense is below two percent of AGI.
• B) $1,000
• C) $2,500
• D) $3,000
• E) None of these

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Definitions:

Stimulate Qi

A concept in traditional Chinese medicine referring to practices aimed at enhancing or balancing the flow of 'qi' or life energy throughout the body.

Traditional Chinese Medicine (TCM)

A holistic and ancient system of health care originating in China, using techniques such as herbal medicine, acupuncture, and qigong to prevent, diagnose, and treat illness.

Tui Na

A form of Chinese manipulative therapy often used in conjunction with acupuncture, moxibustion, fire cupping, Chinese herbalism, tai chi, and qigong.

Manipulative Technique

A method used in physical therapy, chiropractic, and osteopathy that involves manually moving or exercising joints or muscles to improve health and alleviate pain.