Question

ASSUME that the taxpayer’s AGI is $80,000, and includes net investment income > 200 indicate the...

ASSUME that the taxpayer’s AGI is $80,000, and includes net investment income > 200 indicate the amount of the person’s Itemized Deduction, if any.
Kate paid the following interest:
Interest on Student Loans 600
Interest on Home Mortgage 7,000
Interest on a second home 3,500
Interest on a third home 4,500
Interest on a home equity loan to buy a car 1,500
Interest on his brokerage margin account 200
Interest on a loan to buy a bass boat 1,200

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Answer #1

Deductions:

a) Interest on student loan= 600(deductible)

b)Interest on home mortgage=7000(deductible)

c) Interest on second home=3500(deductible)

d)Interest on third home= not deductible

e)Interest on home equity loan= not deductible( shall be only deductible if used for a new roof, kitchen renovation)

f) Interest on brokerage margin account=200(deductible)

g)Interest on loan to buy a bass boat=not deductible(shall only be deductible as the second home loan if the boat has one berth, a permanent galley, and a head)

TOTAL AMOUNT DEDUCTIBLE=11300

#NOTE:Total Interest deductible shall not exceed @30% of the gross total income.

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