Keith bought his home several years ago for $110,000. He paid $10,000 down on the purchase and

Question:

Keith bought his home several years ago for $110,000. He paid $10,000 down on the purchase and borrowed the remaining $100,000. When the home is worth $230,000 and the balance on his mortgage is $40,000, Keith borrows $120,000 using a home equity loan. Keith uses the proceeds of the loan to pay off some gambling debts.
During the year, Keith pays $3,200 in interest on the original home mortgage and $7,600 in interest on the home equity loan. What is Keith’s allowable itemized deduction for interest paid?