Ramon Incurred $83,100 of Interest Expense Related to His Investments

question 44

Multiple Choice

Ramon incurred $83,100 of interest expense related to his investments in 2011.His investment income included $34,500 of interest and a $37,500 net capital gain on the sale of securities.What is the maximum amount of Ramon's investment interest expense deduction in 2011?

• A) $19,500.
• B) $34,500.
• C) $72,000.
• D) $83,100.
• E) None of the above.

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Definitions:

Cash Equivalent

Short-term, highly liquid investments easily convertible to known amounts of cash and so near their maturity that they present minimal risk of changes in value.

Liquid

Describes an asset's ability to be quickly converted into cash without significant loss in value.

Maturity Date

The maturity date is the specified date on a financial instrument at which the principal (or final payment) is due to be paid to the holder.