Stoycho and Selen are married and have the following investment income for 2009 and 2010:
|
|
2009
|
2010
|
|
Interest on U.S. Treasury notes
|
$1,200
|
$1,400
|
|
Cash dividends
|
3,000
|
2,200
|
|
Interest on savings
|
2,000
|
1,500
|
|
Interest on state of Montana bonds
|
800
|
800
|
|
Net long-term capital gain
|
1,000
|
500
|
Their adjusted gross income before considering the investment income is $84,000 in 2009 and $73,500 in 2010. Stoycho and Selen pay $9,000 in investment interest in 2009 and $5,000 in 2010. The investment interest is incurred to acquire all the investments in their portfolio.
Write a letter to Stoycho and Selen explaining how much investment interest they can deduct for 2009 and 2010.