Question
Dorothie paid the following amounts during the current year: Interest on her home mortgage (pre-12/16/17) $9,250 Service charges on her checking account 48 Credit card
Dorothie paid the following amounts during the current year:
|
Dorothies residence has a fair market value of $250,000. The mortgage is secured by the home at the time of purchase and has a balance of $180,000. Dorothie used the same home to secure her HELOC with a balance of $50,000. Dorothie used the proceeds of her HELOC to pay for college and to buy a new car. Dorothie has $1,000 of net investment income. Compute Dorothies interest deduction in the following scenarios:
a. The current tax year is 2018. Use the Interest You Paid section of Schedule A on Page 5-23 to calculate Dorothies interest deduction for the current year. $10,250
b. Same as part a, and Dorothie used the HELOC proceeds to add a new bedroom to her home. $?
c. Same as part a, but Dorothies home is valued at $1.2 million and her mortgage balance is $900,000. $?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started