[25] Debby Dale purchased her home in December Year 1 for $135,000. In December Year 7, when her existing mortgage was $110,000, she borrowed $30,000 on a second mortgage to put her nephew through law school. In January Year 8, she borrowed $15,000 on a third mortgage and used the money to take a vacation and to pay household and shopping bills. Assuming the fair market value of her residence is $170,000 at all times, Debby may deduct the interest associated with how much of the mortgage debt? A. $140,000 B. $110,000 C. $125,000 D. $155,000 [26] Which of the following is considered trade or business income for the purpose of determining the employee's net operating loss? A. Distribution from a H.R. 10 (Keogh) retirement plan set up by a self-employed person. B. Interest income from savings. C. Gain on sale of investment property. D. Salary from part-time employment.

[25] Debby Dale purchased her home in December Year 1 for $135,000. In December Year 7 , when her existing mortgage was $110,000, she borrowed $30,000 on a second mortgage to put her nephew through law school, In january Year 8, she borrowed $15,000 on a third mortgage and used the money to take a vacation and to pay household and shopping bills. Assuming the fair market value of associated witr A. $140,000 B. $110,000 D. $155,000 [26] Which of the following is considered trade or business income for the purpose of determining the employee's net operating loss? A. Distribution from a H.R, 10 (Keogh) retirement plan set up by a self-employed person. B. Interest income from savings. C. Gain on sale of investment property. D. Salary from part-time employment