Ming earned net investment income of $11,000 during 2017 and incurred investment interest expense of $3,000 during the year related to a stock purchase.She incurred other investment interest expenses of $7,000 during the year.Ming is limited to a deduction of $3,000 of investment interest expense in 2017.

Question

Quizplus · Accepted Answer

Ming can deduct investment interest expenses up to the amount of her net investment income, which is $11,000. Therefore, she can deduct $10,000 of her total $10,000 investment interest expenses ($3,000 related to stock purchase + $7,000 other investment interest expenses), not just $3,000.

Ming Earned Net Investment Income of $11,000 During 2017 and Incurred