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If you are investing in Tax Exempt Bonds ($250,000 purchase price providing $20,000 of tax exempt interest

annually), and have to borrow money ($250,000 borrowed requiring $16,250 in interest payments annually) to purchase these bonds. How much of the $16,250 is deductible and on which form is the interest reported? 

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The entire $16,250 interest expense is... View the full answer

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