A buys a house for $2,000,000 and borrows $1,000,000 towards its purchase.

A incurs 35,000 of interest expense. How much interest expense can A deduct? A also has a brokerage account and borrows $50,000 to purchase securities. A incurs 3,500 of interest expense on the $50,000 of debt. A has 1,500 of interest income and $3,000 of long-term capital gains. 

How much interest expense can A deduct in the current year on the $50,000 debt?

Answer rating: 100% (QA)

3500 A can deduct the full 3500 of interest expense on the 50000 debt in ... View the full answer