Tony Is Married and Files a Joint Tax Return for 2011.He

question 54

Multiple Choice

Tony is married and files a joint tax return for 2011.He has investment interest expense of $95,000 for a loan made to him in 2011 to purchase a parcel of unimproved land.His income from investments [dividends (not qualified) and interest] totaled $18,000.Tony paid $3,600 of real estate taxes on the unimproved land.Tony also has a $4,500 net long-term capital gain from the sale of stock held as an investment.Calculate Tony's maximum investment interest deduction for 2011.

• A) $95,000.
• B) $22,500.
• C) $18,900.
• D) $18,000.
• E) None of the above.

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Definitions:

Biological Assets

Living plants or animals that are held by an entity for the purpose of selling them, producing agricultural produce, or providing services.

Agricultural Produce

Products resulting from agricultural activities that have not been processed significantly, such as crops, livestock, and fisheries.

AASB 13

The Australian Accounting Standards Board document that defines fair value, provides a framework for measuring fair value, and requires disclosures about fair value measurement.

AASB 141

The Australian Accounting Standards Board's standard on Agriculture, outlining the accounting treatment for agricultural activity.