Question

Quinn, a tax accountant in San Jose, CA, purchased a fixer-upper home on February 1, 2020 for $1,500,000. He put down 20% and financed the remainder at an interest rate of 4% per year with a local bank. The loan is secured with a lien on the home. How much interest expense can Quinn deduct on his 2020 Schedule A (enter your answer in whole dollar without $, but with a comma.)?

Answer 1

Cost of the house	$   1,500,000.00
Less: Down payment @20%	$      300,000.00
Loan	$   1,200,000.00
Interest Rate	4%
Interest Expenses	$        48,000.00
Interest expense can Quinn deduct on his 2020 Schedule A	$        48,000.00
Home mortgage interest is reported on Schedule A of the 1040 tax form as itemized deduction