Matthew borrows $250,000 to invest in bonds. During 2014, his interest on the loan is $30,000. Matthews

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Matthew borrows $250,000 to invest in bonds. During 2014, his interest on the loan is $30,000. Matthew’s interest income from the bonds is $10,000. This is Matthew’s only investment income.

a. Calculate Matthew’s itemized deduction for investment interest expense for this year.

$ ___________

b. Is Matthew entitled to a deduction in future years?

Explain ___________________________________________________________________

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Income Tax Fundamentals 2015

ISBN: 9781305177772

33rd Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven Gill

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Question Posted: Jul 16, 2015 06:00 AM

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Matthew borrows $250,000 to invest in bonds. During 2014, his interest on the loan is $30,000. Matthews

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a 10000 limited to Matthews net investment inco...View the full answer

Income Tax Fundamentals 2015

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