Glenda, a calendar year and cash basis taxpayer, rents property from Janice. As part of the rental agreement, Glenda pays $25,400 rent on April 1, 2016 for the 12 months ending March 31, 2017.
If required, round any division to two decimal places. Round your final answer to the nearest dollar.
a. Glenda's deduction for rent expense in 2016 is $.________
b. Assume the same facts, except that the $25,400 is for 24 months' rent ending March 31, 2018. Glenda's deduction for rent expense in 2016 is $.__________
2) Murphy has a brokerage account and buys on the margin, which resulted in an interest expense of $20,000 during the year. Income generated through the brokerage account was as follows:
Municipal interest $50,000
Taxable dividends and interest 350,000
In your computations, do not round any division.
How much investment interest can Murphy deduct?
$ _________