OUESTION FOUR $($SEVEN POINTS$)$

In $2022,$ Carol purchases her first home and incurs acquisition indebtedness of $$625,000$ associated with the property. She pays interest of $$42,000$ and points of $$4,000$ on this acquisition indebtedness.

Later in the year, Carol also purchased a boat $($used for recreational purposes$)$ for $$400,000$ using a home equity loan of $$250,000$ on her principal residence $($and $$150,000$ of personal funds$).$ Carol paid $$16,000$ of interest and $$2,000$ in points on this home equity debt this year. How much of this interest pertaining to the acquisition indebtedness and home equity debt is deductible by Carol? How much of this interest would be deductible if Carol had utilized the home equity debt of $$250,000$ to improve her personal residence by repairing the roof?

Further, assume Carol takes out a further home equity loan of $$20,000$ to purchase $$10,000$ of tax$-$exempt securities and $$10,000$ of taxable investments. The interest payments associated with the $$20,000$ come to $$1200.$ Taxable net investment income for the year $($before any interest deduction$)$ is $$700.$ How much of this interest is tax deductible $($assuming that Carol itemizes her deductions$)?$