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:

Cyclical Pattern

A sequence of events or phenomena that recur in a regular, predictable cycle or series.

Domestic Violence

A pattern of behavior in any relationship that is used to gain or maintain power and control over an intimate partner, including physical, sexual, emotional, economic, or psychological actions or threats.

Patriarchal

Related to a social system where men hold primary power and predominate in roles of political leadership, moral authority, social privilege, and control of property.

Emotionally Distant

Refers to individuals who are not easily open to sharing their feelings or forming close emotional connections with others.