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Case A-E please. Question 3 (25 marks) Each of th foll+inindebefident Kases involves interest payments. and the issue is interest deductibility. Case A: Linda vandsbOiroiQed.S700,OOffand

Case A-E please. image text in transcribed

Question 3 (25 marks) Each of th foll+inindebefident Kases involves interest payments. and the issue is interest deductibility. Case A: Linda vandsbOiroiQed.S700,OOffand used the funds to purchase an income-producing property. Later on. she sold the property for $350,000. She used the 930.000 to' acquire two properties: property A cost $100,000 and property g cost $250,000. How will the linked to the KWO properties? case B: OWned Kev horne far inany years and, Over this period Of time, had complete* paid Off the mortgage. Given the low available on mortgages, she negotiated a I Oyear. $530,000 variable rate mortgage, with an interest rate Of toen invested the entire $550,000 in publicly-traded securities. Would the interest on the rnortgage be eduttibJe7 Expla!nyour conclusion. 'Sam smithbOrrOwed SS30bOOand invested the entire loan proceedSin pubhdy.traded securities. After 8 months. the securities . ValuedrOped QO$SOO,OOC. At this point, Sam Smith sold the securities and used the proceeds to reduce the loan to $230,000. Since h fi'longer owns, the securitJes, can Sam Smith deduct the interest on the remaining loan amount Of $230,000? Explain your Case D: $200,000 and used the funds to acquire an income-producing property. He then sold the used the proceeds to acquire two properties: property A cost $230.0CO and property B cost $170.000. HOW Will the in ; to the two properties? Case Arbata hada current fair marketvaludt 3800000. USingherrnargin balanceavailabtefromher was outstanding. can she deduci this interest against the incomeeornedduring this period on

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