Question

Gene bought a principal residence in San Francisco on July 12 , 2020. The amount of the mortgage was $1,200,000 . How much of this debt qualifies as having its interest being deductible?

a)$ 750,000

b)$ 1,000,000

c)$1,100,000

d)$1,200,000

Answer 1

Per IRS, homeowners who bought houses after December 31, 2017 can deduct interest on the first $750,000 on the mortgage each month. Generally, if a taxpayer wants to claim the mortgage interest deduction, it involves itemizing the deduction on the tax return.

As such, the correct answer for the question is Option A - $750,000.

Option B is incorrect as $1,000,000 was the amount before December 31, 2017 which is incorrect since the date mentioned in the question is July 12, 2020.

Option C and Option D are incorrect as these amounts reflect incorrect amounts.

Please let me know if you have any questions via comments and all the best :) !