#1 An individual can deduct for tax purposes the interest expense incurred on the mortgage loan attached to his or her personal residence. Is this statement true? Explain. Can be true if the money received from the loan is used to invest and taxable income is earned from the investment. Question #2 If a loss occurs from the renting of real estate (that is, if annual expenses exceed rental income), the loss is not recognized in determining a taxpayers overall net income for tax purposes. Is this statement true? Explain. This not true, the loss from renting real estate can be deducted from all types of income. The only limitation is that rental losses cannot be increased or created by CCA