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During the year, Rachel earned $18,000 of interest income on private activity bonds that she purchased in 2016. She also incurred interest expense of $7,000
During the year, Rachel earned $18,000 of interest income on private activity bonds that she purchased in 2016. She also incurred interest expense of $7,000 in connection with amounts borrowed to purchase the bonds.
How do these amounts affect Rachel's taxable income? Could there be a related beneficial effect in calculating AMT? Explain.
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