Clay Incurs $5,000 of Investment Interest Expense Related to Purchasing

Multiple Choice

Clay incurs $5,000 of investment interest expense related to purchasing Renco Company stock and New Orleans municipal bonds. He receives $6,000 of dividends on the stock and $14,000 of interest on the bonds. The amount of investment interest expense Clay can deduct is:

A) $- 0 -
B) $1,500
C) $2,500
D) $3,500
E) $5,000