Investment and plan on selling in a few years

Reference no: EM133609019

Question: Your client, Mr. and Mrs. Jones, have asked you about being able to deduct investment interest during 2022. They took out a loan to purchase a commercial lot that they will hold for investment and plan on selling in a few years. The interest paid on the loan in 2022 is $5,000. They have heard that the new tax law has changed some of the rules about itemized deductions, but they don't know the details. They have never deducted investment interest before and don't know if there is some kind of limit on what they can deduct. Also they want to know if they will lose the deduction if they can't deduct the interest this year. They plan on having about $26,000 in itemized deductions NOT counting the $5,000 interest deduction. They will have $2500 in investment income this year. 2022 MFJ standard deduction is $25,900

Reference no: EM133609019

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