Question: Mr. Cole is considering purchasing a new principal residence for $1,500,000 and intends to finance the purchase with a mortgage in the amount of $1,150,000.

Mr. Cole is considering purchasing a new principal residence for $1,500,000 and intends to finance the purchase with a mortgage in the amount of $1,150,000. Which code section and subsection provide the maximum amount of acquisition indebtedness mortgage on which the interest expense will be deductible?

Write a memorandum to Mr. Cole describing the results of your research.

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