1. Patricia purchased a home on January 1, 2014 for $1,200,000 by making a down payment of $100,000 and financing the remaining $1,100,000 with a 30-year loan, secured by the residence, at 6 percent. During 2014, Patricia made interest-only payments on the loan of $66,000. What amount of the $66,000 interest expense Patricia paid during 2014 may she deduct as an itemized deduction?

2. On March 31, 2014, Mary borrowed $200,000 to buy her principal residence. Mary paid 3 points to reduce her interest rate from 6 percent to 5 percent. The loan is for a 30-year period. What is Mary's 2014 deduction for her points paid?

3. Dawn (single) purchased her home on July 1, 2005. On July 1, 2013 Dawn moved out of the home. She rented out the home until July 1, 2014 when she sold the home and realized a $230,000 gain (assume none of the gain was attributable to depreciation). What amount of the gain is Dawn allowed to exclude from her 2014 gross income?