LO.9 Helen borrowed $200,000 to acquire a parcel of land to be held for investment C R I T I CAL THINKING purposes. During 2010, she paid interest of $20,000 on the loan. She had AGI of $100,000 for the year. Other items related to Helen’s investments include the following:

Investment income $14,100 Long-term capital gain on sale of stock 5,500 Investment counsel fees 3,000 Helen is unmarried and elects to itemize her deductions. She has no miscellaneous itemized deductions other than the investment counsel fees.

a. Determine Helen’s investment interest deduction for 2010.

b. Discuss the treatment of the portion of Helen’s investment interest that is disallowed in 2010.