Charles Wolfe purchased the following long-term investments at par during the year:
$20,000 general obligation bonds of Burlington County (wholly tax-exempt)
$10,000 debentures of Arrow Corporation
Wolfe financed these purchases by obtaining a $30,000 loan from Union National Bank. For the year, Wolfe made the following interest payments:
Union National Bank Qualified residence interest on home mortgage
Interest on credit card charges
$3,600
3,000 500
Wolfe’s net investment income for the year was $10,000. What amount can Wolfe utilize as interest expense in calculating itemized deductions for the year?
A. $3,000
B. $4,200
C. $4,700
D. $7,100