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interest allocable to a trade or business (other than the trade
or business of performing services as an employee), and qualified
residence interest are not personal interest. Sec. 163(h)(2).
A taxpayer may deduct 10 percent of personal interest he or
she paid in 1990. Sec. 163(h)(5), (d)(6)(B). A taxpayer may
deduct interest on property held for investment up to the net
investment income of the taxpayer for the taxable year. Sec.
163(d)(1). Net investment income is the amount by which
investment income exceeds investment expenses. Sec.
163(d)(4)(A).
1(...continued)
SEC. 163(h) Disallowance of Deductions for Personal
Interest.--
(1) In General.--In the case of a taxpayer other
than a corporation, no deduction shall be allowed
under this chapter for personal interest paid or
accrued during the taxable year.
(2) Personal Interest.--For purposes of this
subsection, the term “personal interest” means any
interest allowable as a deduction under this
chapter other than--
(A) interest paid or accrued on indebtedness
properly allocable to a trade or business
(other than the trade or business of
performing services as an employee),
(B) any investment interest (within the
meaning of subsection (d)) * * *
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