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Please show all work. 3. In 2020, Luigi earned $9,000 in net investment income and incurred $14,000 of investment interest expense. Luigi paid off the
Please show all work.
3. In 2020, Luigi earned $9,000 in net investment income and incurred $14,000 of investment interest expense. Luigi paid off the loan in early 2021, so he only paid $2,000 of investment interest expense in 2021. He earned $10,000 of net investment income in 2021. How much investment interest expense can Luigi deduct in 2021? A) $10,000 B) $7,000 C) $2,000 D) $0 4. Ozzie and Harriet purchased a new condominium in Boston this year to use as their primary residence. The purchase price of the condominium is $1.25million. The couple obtained a $1.0 million mortgage from the bank and paid the balance in cash. On their joint tax return the couple will be allowed an itemized deduction for interest expense on a principal balance of up to A) $1.5 million. B) $1.0 million. C) $750,000. D) $500,000Step by Step Solution
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