Question: instructions : Choose the best multiple choice answer and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work.

instructions : Choose the best multiple choice answer and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work. All sources must be noted.

____ 14. Gas, married filing separately, took out a mortgage on his home for $650,000 nine years ago. In August of this year, when the home had a fair market value of $690,000 and he owed $650,000 on the mortgage, he took out a home equity loan for $60,000. Gas used the funds to purchase a yacht to be used for recreational purposes. What is the maximum amount of debt on which he can deduct home equity interest?

a.	$40,000.
b.	$35,000.
c.	$50,000.
d.	$60,000.
e.	None of the above.

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