Charlie owns one house that he lives in. He bought the house in 2010 for $530,000, using a $390,000 loan. In 2015 when the loan balance was $190,000 (he had paid off $200,000 of the $390,000 loan) and the house was worth $600,000, he refinanced the loan with a new loan of $420,000. He used $160,000 of the extra cash (he obtained $230,000 in cash) to remodel the kitchen, bathrooms and build a pool. The rest of the money he used to pay for a vacation.In 2019 he obtained a second additional loan secured by the house of $50,000 (the house was still worth $600,000) and he used $30,000 of the money to redo his kitchen, the remainder of the money he used for a new car. If during the year Charlie paid $8,000 in interest on the $50,000 loan, how much of the $8,000 interest expense would you expect to be deductible on his Federal return? Assume none of the balance of the either outstanding loan was paid down. Show your work.