59. LO.3 Murphy has a brokerage account and buys on the margin, which resulted in an interest expense of $20,000 during the year. Income generated through the brokerage account was as follows:

Municipal interest $ 50,000 Taxable dividends and interest 350,000 How much investment interest can Murphy deduct?

• Interest income of $3,750 on City of Springfield school bonds.
• Alimony of $15,000 from Wayne.
• Distribution of $4,800 from ST Partnership. Her distributive share of the partnership passive taxable income was $5,300.
From her checkbook records, she determines that she made the following payments during 2012:
• Charitable contributions of $3,500 to First Presbyterian Church and $1,500 to the American Red Cross (proper receipts obtained).
• Mortgage interest on her residence of $7,800.
• Property taxes of $3,100 on her residence and $1,100 on her car.
• Estimated Federal income taxes of $3,800 and estimated state income taxes of $1,000.
• Medical expenses of $5,000 for her and $800 for Jason. In December, her medical insurance policy reimbursed $1,500 of her medical expenses.
• A $1,000 ticket for parking in a handicapped space.
• Attorney’s fees of $500 associated with unsuccessfully contesting the parking ticket.
• Contribution of $250 to the campaign of a candidate for governor.
• Because she did not maintain records of the sales tax she paid, she calculates the amount from the sales tax table to be $994.
Calculate Roberta’s net tax payable or refund due for 2012. If you use tax forms, you will need Form 1040 and Schedules A, B, D, and E. Suggested software: H&R BLOCK At Home.