Tracy Invested in the Following Stocks and Bonds During 2016

Essay

Tracy invested in the following stocks and bonds during 2016.
Blue,Inc.
$25,000
City of Falcon bonds
75,000
To finance the investments,she borrowed $100,000 from Swan Bank.Interest expense paid on the loan during 2016 was $5,000.During 2016,Tracy received $1,250 of dividend income from Blue,Inc.and $3,000 of interest income on the municipal bonds.
a.Determine the amount of Tracy's gross income.
b.Determine the maximum amount of Tracy's deductible interest expense.