Frank can reclaim the DIRT deducted from his deposit interest if his gross investment returns are in excess of which proportion of his total gross income?

• A. 20%
• B. 25%
• C. 33%
• D. 50%

Answer: (D)

The key point is how DIRT relief works: a claim to reclaim the DIRT deducted on deposit interest is available when your investment income makes up a large share of your overall income. Specifically, the rule uses a 50% threshold. If your gross investment returns exceed half of your total gross income, you can reclaim the DIRT that was deducted. That’s why the correct result is the 50% option. The other lower percentages don’t meet this criterion, so they wouldn’t qualify you for the reclaim.