A taxpayer has $2,500 in interest expenses connected to the production of investment income. The same year, they have $1,200 in investment income. What amount of deduction and/or tax effect does this have? The expenses are disallowed, and they have $1,200 in investment income. They have $1,200 in investment income, and $1,200 in allowable itemized deductions. The excess is lost. O They have $0 in investment income, which is netted before it's reported. They have $1,200 in investment income, and $1,200 in allowable itemized deductions. The excess is carried into future years to potentially offset investment income