Question: Jackson owns two residences. The second residence, which has never been used for rental purposes, is the only residence that is subject to a mortgage.

Jackson owns two residences. The second residence, which has never been used for rental purposes, is the only residence that is subject to a mortgage. The following expenses were incurred for the second residence in 2010:

Mortgage interest $5,000 Utilities 1,200 Insurance 6,000 For regular income tax purposes, what is the maximum amount allowable as a deduction for Jackson’s second residence in 2010?

a. $6,200 in determining adjusted gross income.

b. $11,000 in determining adjusted gross income.

c. $5,000 as an itemized deduction.

d. $12,200 as an itemized deduction.

MODULE 35 INDIVIDUAL TAXATION 875

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