Problem 6-40 (LO 6-2)

[The following information applies to the questions displayed below.]

This year, Randy paid $31,750 of interest on his residence. (Randy borrowed $500,000 to buy his residence, and it is currently worth $550,000.) Randy also paid $3,750 of interest on his car loan and $6,075 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances?

Problem 6-40 Part-a

a. Randy received $3,200 of interest this year and no other investment income or expenses. His AGI is $75,000.

Could you please explain how you got your answer.