Mrs. Carr made the following interest payments. Determine the extent to which she can deduct each payment
Question:
Mrs. Carr made the following interest payments. Determine the extent to which she can deduct each payment on her Form 1040.
a. $21,000 on a $280,000 mortgage incurred to construct (and secured by) her personal residence.
b. $3,000 on a $34,000 second mortgage secured by her personal residence. Mrs. Carr used the proceeds to pay off her credit card debt.
c. $2,290 on credit card debt.
d. $15,000 on a $200,000 bank loan incurred to purchase inventory for her sole proprietorship.
e. $1,610 on a bank loan incurred to purchase a car for her son.
f. $1,750 on a bank loan incurred to purchase mutual fund shares that generated $1,900 dividend income this year.
Assume the taxable year is 2018.
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a Mrs Carr has an itemized deduction for 21000 qualified residence interest b No deduction f...View the full answer
Principles Of Taxation For Business And Investment Planning 2019 Edition
ISBN: 9781260161472
22nd Edition
Authors: Sally Jones, Shelley C. Rhoades Catanach, Sandra R Callaghan
