essica purchased a home on January 1, year 1 for $500,000 by making a down payment of $200,000 and financing the remaining $300,000 with a 30-year loan, secured by the residence, at 6 percent. On July 1, year 1, when her home was worth $500,000 Jessica borrowed an additional $125,000 secured by the home at an interest rate of 8 percent. What is the maximum amount of the $28,000 interest expense Jessica paid during year 2 that she can deduct as an itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard?

		0
		10,000
		26,000
		28,000