Incurred the following expenditures:

Qualified medical expenses of $7,000

Investment interest expense of 12,000

Other investment activity expenses 14,000

Qualified residence interest 9,000

Interest on loan on personal auto 2,300

Charitable contributions 2,700

State income tax paid 6,500

State sales tax paid 4,600

Property taxes 4,400

Tax return preparation and consulting fees 5,800

Income consisted of the following items:

Salary $63,000

Interest income 6,600

Long-term capital gains 23,000

Long-term capital losses (18,000)

Requirement a. Compute Joe's taxable income for the year (assuming that he makes an election to have the net capital gain taxed at the regular tax rates).

Begin by calculating the adjusted gross income (AGI). (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero.)

Salary		63,000
Interest income		6,600
Net long-term capital gain		5,000
Adjusted gross income (AGI)		74,600

Part 2

Now calculate the itemized deductions. (Complete all input fields. Enter a "0" for appropriate balances.)

Medical expenses		7,000
Less:	7.5% of AGI	5595
Excess medical expenses			1405
Charitable contributions			2,700
Taxes			10,000
Qualified residence interest			9,000
Investment interest			11,600
Total itemized deductions

Part 3

Compute Joe'

taxable income for the year.

Adjusted gross income (AGI)
Minus:	Deductions from AGI:
	Itemized deductions	34,705
Taxable income		39,895

Part 4

Requirement b. What is

Joe's

investment interest carryover (if any)?

Joe's investment interest carryover is

.

What if the Other investment activity expenses are more than the income investment? same question, different figures.