Question

QUESTION 39

1. Interest paid or accrued during 2018 on aggregate acquisition indebtedness of $2 million or less ($1 million or less for married persons filing separate returns) is deductible as qualified residence interest.

   True

   False

QUESTION 40

1. In 2019, Jonathan pays real estate taxes of $18,000 and New York State income taxes of $17,000. Assuming he itemizes, what deduction for taxes can Jonathan claim in 2019?

   	a.	$10,000
   	b.	$28,000
   	c.	$27,000
   	d.	$35,000

Answer 1

TAXPAYERS CAN DEDUCT THE INTEREST PAID ON FIRST AND SECOND MORTGAGES UP TO $1,000,000 IN MORTGAGE DEBT (THE LIMIT IS $500,000 IF MARRIED AND FILING SEPARATELY). ANY INTEREST PAID ON FIRST OR SECOND MORTGAGES OVER THIS AMOUNT IS NOT TAX DEDUCTIBLE

QUESTION 39 : INTEREST PAID OR ACCRUED DURING 2018 OF $ 2MILLION IS DEDUCTIBLE AS MAXIMUM INTEREST CAN BE DEDUCTIBLE UPTO $ 5 MILLION FOR MARRIED COUPLE FILLING JOINTLY

SO THE STATEMENT IS TRUE

QUESTION 40

SOME COMMON ITEMIZED TAX DEDUCTIONS INCLUDE:

• MEDICAL AND DENTAL EXPENSES
• STATE AND LOCAL TAXES
• REAL ESTATE MORTGAGE INTEREST
• GIFTS BY CASH OR CHECK
• CASUALTY AND THEFT LOSSES FROM A FEDERALLY DECLARED DISASTER

The TCJA capped the deduction for state and local taxes at $10,000

SO TOTAL DEDUCTION =18000+10000 =28000

SO OPTION B $ 28000 IS CORRECT