1. Margaret Lindley paid $15,000 of interest on her $300,000 acquisition debt for her home (fair market value of $500,000), $4,000 of interest on her $60,000 home-equity debt used to buy a new boat and car, $1,000 of credit card interest, and $3,000 of margin interest for the purchase of stock. Assume that Margaret Lindley has $10,000 of interest income this year and no investment expenses. In 2021**, how much of the interest expense may she deduct this year?

a. $23,000

b. $22,000

c. $19,000

d. $18,000

e. None of the choices are correct.

2. Margaret Lindley paid $15,350 of interest on her $300,000 acquisition debt for her home (fair market value of $500,000), $4,700 of interest on her $60,000 home-equity debt used to buy a new boat and car, $1,070 of credit card interest, and $3,140 of margin interest for the purchase of stock. Assume that Margaret Lindley has $10,070 of interest income this year and no investment expenses. In 2021**, how much of the interest expense may she deduct this year?

a. $24,260

b. $23,190

c. $20,050

d. $18,490

e. None of the choices are correct.