1. Joe and Julie Jones purchase a house on January 1 for $1,000,000 by paying $200,000 down and borrowing the remaining $800,000 with a 6 percent loan secured by the house. the Jones only make interest only payments on the loan in years 1 & 2 . a. Assume year 1 is 2017, how much interest would they be able to deduct in year 2 (2018)? b. Assume year 1 is 2020, how much interest would they be able to deduct in year 2020? c. Assume year 1 is 2020 and by the beginning of year 4 (2024) they have paid down $500,000 towards the principal of the loan. In year 4, they borrow an additional $100,000 through an equity loan (loan secured by the home) which is used to finish the basement in their house. The new loan carries a 7% rate. How much interest can the Jones deduct on the $100,000? d. Assume the same facts in C but instead of finsihing their basement they used the entire proceeds of the loan, $100,000, to purchase ane w car. How much of the interest is deductible on the loan?