Brandon and Jane Forte File a Joint Tax Return and Decide

question 33

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 $1,100 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% and they make no special elections, what is the amount of investment interest expense deduction for the year?

• A) Zero.
• B) $1,000.
• C) $2,500.
• D) $3,000.
• E) None of the choices are correct.

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Definitions:

Parallel Structure

The repetition of a chosen grammatical form within a sentence to provide clarity and improve writing style.

Typographical Errors

Typographical errors, or typos, are mistakes made in the typing process, often resulting in incorrect spelling, punctuation, or grammar in written material.

Flextime

A flexible working arrangement that allows employees to alter their start and end times, offering a balance between personal and professional life.

Denotation

A word’s literal or “dictionary” meaning. Most common words in English have more than one denotation. Context usually makes it clear which of several meanings is appropriate.