1 answer

Patricia purchased a home on January 1, 2017 for $1,310,000 by making a down payment of...

Question:

Patricia purchased a home on January 1, 2017 for $1,310,000 by making a down payment of $100,000 and financing the remaining $1,210,000 with a 30-year loan, secured by the residence, at 6 percent. During year 2017 and 2018, Patricia made interest-only payments on the loan of $72,600. What amount of the $72,600 interest expense Patricia paid during 2018 may she deduct as an itemized deduction? (Assume not married filing separately.)


Answers

Deduction is only available only up to amount $1,000,000

Interest on such amount = $1,000,000 * 6%

=$60,0000

Only $60,000 out of $72,600 is available for deduction.

.

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