eBook Calculator Problem 5-22 (Algorithmic) Interest (LO 5.8) Matthew borrows $355,000 to invest in bonds. During the current year, his interest on the loan is $35,500. Matthew's taxable interest income from the bonds is $21,300. This is Matthew's only investment income. a. Calculate Matthew's itemized deduction for investment interest expense for this year. $ 3,000 x b. Is Matthew entitled to a deduction (related to the investment interest expense) in future years? Yes the unused deduction of $ 17,000 X may be carried forward as an investment interest deduction in future years. Feed Check My Work Taxpayers are allowed a deduction for certain interest paid or accrued during the tax year. Interest is defined as an amount paid for the use borrowed funds. The type and amount of the deduction depend on the purpose for which the money is borrowed. To prevent abuses by taxpayers, the Internal Revenue Code includes a provision limiting the deduction of investment interest expense. This provision limits the amount of deductible interest on loans to finance investments