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Publication 550 2008 Tax Year

Form 4952 Investment Interest Expense Deduction 2008

Summary: This is an example of Form 4952 (2008) as pertains to the description in the text. The line items are completed as follows:

Name(s) shown on return” field contains Jane Smith
Identifying number” field contains 111-00-1111
Under“Part I: Total Investment Interest Expense”:
1. Investment interest expense paid or accrued in 2008. See instructions” field contains 12,500
2. Disallowed investment interest expense from 2007 Form 4952, line 7” field contains 0
3. Total investment interest expense. Add lines 1 and 2” field contains 12,500
Under“Part II: Net Investment Income”:
4a. Gross income from property held for investment (excluding any net gain from the disposition of property held for investment)” field contains 3,000
4b. Qualified dividends included on line 4a” field is blank
4c. Subtract line 4b from line 4a” field contains 3,000
4d. Net gain from the disposition of property held for investment” field contains 10,000
4e. Enter the smaller of line 4d or your net capital gain from the disposition of property held for investment. See instructions” field contains 9,000
4f. Subtract line 4e from line 4d” field contains 1,000
5. Investment expenses. See instructions” field contains 980
6. Net investment income. Subtract line 5 from line 4f. If zero or less, enter 0” field contains 12,020
Under“Part III: Investment Interest Expense Deduction”:
7. Disallowed investment interest expense to be carried forward to 2008. Subtract line 6 from line 3. If zero or less, enter 0” field contains 480
8. Investment interest expense deduction. Enter the smaller of line 3 or 6. See instructions” field contains 12,020

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