Randolph Borrows $100,000 from His Uncle's Bank and Invests the Proceeds

question 109

Multiple Choice

Randolph borrows $100,000 from his uncle's bank and invests the proceeds in various corporate bonds.He pays $9,000 in interest on the loan during the current year.The bonds produce $7,200 of interest income.Randolph reports adjusted gross income of $100,000 in the current year.If the interest income is his only investment income,how much of the interest expense is deductible by Randolph?

• A)$7,000
• B)$7,200
• C)$9,000
• D)None of this interest is deductible.

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Definitions:

Conservation Biology

Discipline that seeks to understand the effects of human activities on species, communities, and ecosystems, and to develop practical approaches to preventing the extinction of species and the destruction of ecosystems.

Edge Effects

The changes in population or community structures that occur at the boundary of two or more habitats, often affecting biodiversity and ecological dynamics.

Diversity

The presence of a wide range of variation in qualities or attributes within a group or environment.

Biodiversity

Total number of species, the variability of their genes, and the communities in which they live.