In 2018, Kathleen Tweardy incurs $30,000 of interest expense related to her investments. Her investment income includes $7,500 of interest, $6,000 of qualified dividends, and a $12,000 net capital gain on the sale of securities. Kathleen asks you to compute the amount of her deduction for investment interest, taking into consideration any options she might have.

If Kathleen elects not to treat the capital gain and qualified dividends as investment income for purposes of the investment interest expense limitation, her deduction will be $______

If Kathleen elects to treat the capital gain and qualified dividends as investment income for purposes of the investment interest expense limitation, her deduction will be $________