A married couple took out a mortgage on their home for $220,000 seven years ago. In July of this year, when the home had a fair market value of $250,000 and they owed $140,000 on the mortgage, they took out a home equity loan for $120,000. They used the funds to take their entire family on a grand cruise to Australia. What is the maximum amount of home equity indebtedness on which they can deduct home equity interest?

$100,000

$120,000

$90,000

$220,000

Answer rating: 100% (QA)

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