LO.7 In the current year, Dylan earned taxable and tax-exempt interest from the following investments. Investment 10-year municipal bond (issued in 2009) 10-year private activity bond (issued in 2010) 10-year Treasury bond (issued in 2014) 10-year private activity bond (issued in 2016) Savings account Interest Income $1,300 1,600 2,000 900 1,100 Dylan purchased all of the bonds on their issuance date. In addition, Dylan bor- rowed funds with which to purchase the 2010 private activity bond and incurred interest expense of $350 on that loan in the current year.

a. How much interest income will Dylan recognize for regular tax purposes in the current year?

b. What is her current-year AMT preference or adjustment for interest?