During 2023, James, a single, cash method taxpayer incurred the following expenditures:

James’ income consisted of the following items:

a. Compute James’ taxable income for the year (assuming that he makes an election to have the net capital gain taxed at the regular tax rates).

b. What is James’ investment interest carryover (if any)?

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Qualified medical expenses $ 8,000 Investment interest expense 16,000 Other investment activity expenses 15,000 Qualified residence interest 12,000 Interest on loan on personal auto 2,000 Charitable contributions 3,000 State income tax paid 7,000 State sales tax paid 4,500 Property taxes 4,000 Tax return preparation and consulting fees 5,000