LO.2 Helen Derby borrowed $150,000 to acquire a parcel of land to be held for investment purposes. During the current year, she reported AGI of $90,000 and paid interest of $12,000 on the loan. Other items related to Helen's investments include the following: Interest and annuity income Long-term capital gain on sale of stock Real estate tax on the investment land $11,000 3,500 800

a. Determine Helen's investment interest deduction for the current year.

b. Discuss the treatment of the portion of Helen's investment interest that is disal- lowed in the current year.

c. Complete Helen's Form 4952 using whatever version of the form is available on www.irs.gov. For this purpose, assume that she chooses not to include the long-term capital gain as investment income. Her Social Security number is 123-45-6789.