Wages | $1,600,000 |
Interest income | 400,000 |
Adjusted gross income | 2,000,000 |
In addition, A has the following items of expense qualifying as itemized deductions:
Investment expenses | $70,000 |
Job-related expenses | 30,000 |
Investment interest expense | 75,000 |
State income taxes | 120,000 |
A's investment expenses and job-related expenses are miscellaneous itemized deductions. In addition, A's investment interest expense and investment expenses are properly allocable to net investment income (within the meaning of this section). A's job-related expenses are not properly allocable to net investment income. Of the state income tax expense, A applied a reasonable method pursuant to paragraph (g)(1) of this section to properly allocate $20,000 to net investment income.
Miscellaneous itemized deductions | $60,000 |
State income tax | 120,000 |
Deductions subject to section 68 | 180,000 |
26 C.F.R. §1.1411-4