6. Brandon and Jane Forte file a joint tax return and decide to itemize their deductions. The Fortes' income for the year consists of $119,200 in salary, $600 interest income, $1,100 nonqualifying dividends, and $600 long-term capital gains. The Fortes' expenses for the year consist of $2,600 in investment interest expense and $820 in tax preparation fees. Assuming that the Fortes' marginal tax rate is 32 percent and they make no special elections, what is the amount of investment interest expense deduction for the year? Multiple Choice

a. $0

b. $600

c. $1,700

d. $2,600

e. None of the choices are correct.

7. Doug and Sue Click file a joint tax return and decide to itemize their deductions. The Clicks' income for the year consists of $89,900 in salary, $1,950 interest income, and $790 long-term capital loss. The Clicks' expenses for the year consist of $1,550 investment interest expense. Assuming that the Clicks' marginal tax rate is 35 percent, what is the amount of their investment interest expense deduction for the year? Multiple Choice

a. $1,160

b. $1,550

c. $1,950

d. $2,340

e. None of the choices are correct.

8. Bob Brain files a single tax return and decides to itemize his deductions. Bob's income for the year consists of $75,900 of salary, $2,550 long-term capital gain, and $1,950 interest income. Bob's expenses for the year consist of $900 in investment advice fees and $205 in tax return preparation fees. What is Bob's investment expense deduction?

Multiple Choice

a. $0

b. $900

c. $205

d. $1,105

e. None of the choices are correct.

9. Alain Mire files a single tax return and has adjusted gross income of $314,000. His net investment income is $43,000. What is the additional tax that Alain will pay on his net investment income for the year? Multiple Choice

a. $0

b. $1,634

c. $4,332

d. $2,698

e. None of the choices are correct

10. Sue invested $8,500 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $27,000 of qualified nonrecourse debt and $27,000 of debt Sue is not responsible to repay because she is a limited partner. Sue is allocated a 10 percent share of both types of debt, resulting in a tax basis of $13,900 and an at-risk amount of $11,200. During the year, ABC LP generated a ($139,000) loss. How much of Sue's loss is disallowed due to her tax basis or at-risk amount? Multiple Choice

a. $0; all of her loss is allowed to be deducted.

b. $2,700 disallowed because of her at-risk amount.

c. $2,700 disallowed because of her tax basis.

d. $5,400 disallowed because of her tax basis.

e. $5,400 disallowed because of her at-risk amount.