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Juana borrowed $100,000 to acquire a parcel of land to be held for investment purposes...

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Accounting

Juana borrowed $100,000 to acquire a parcel of land to be held for investment purposes and paid interest of $11,000 on the loan. She has AGI of $75,000 for the year. Other items related to Juana's investments include the following:

Interest and annuity income

 $10,000
Long-term capital gain on sale of stock 7,500
Real estate tax paid and deducted on investment property 500

a.

Determine Juana's current investment interest deduction, assuming she does not make any special election regarding the computation of investment income.
b.

Discuss the treatment of Juana's investment interest that is disallowed in the current year.
c. What election could Juana make to increase the amount of her current investment interest deduction?

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