George recently received a great stock tip from his friend, Mason. George didn't have any cash on

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George recently received a great stock tip from his friend, Mason. George didn't have any cash on hand to invest, so he decided to take out a $20,000 loan to facilitate the stock acquisition. The loan terms are 8 percent interest with interest-only payments due each year for five years. At the end of the five-year period the entire loan principal is due. When George closed on the loan on April 1, 2015, he decided to invest $16,000 in stock and to use the remaining $4,000 to purchase a four-wheel recreation vehicle. George is unsure how he will treat the interest paid on the $20,000 loan. In 2015, George paid $1,200 interest expense on the loan. For tax purposes, how should he treat the 2015 interest expense?
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Taxation Of Individuals And Business Entities 2016

ISBN: 9781259334870

7th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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