In 2021, Nasira, a single taxpayer, bought a principal residence, taking out a mortgage of $500,000. Later in 2021, she takes out a home equity loan of $200,000 to build an addition to the home. Which of the following, with respect to the deductibility of the interest on the home equity loan, is CORRECT?

A)

None of the interest is deductible unless she has occupied the home two of the past five years.

B)

The interest on the debt is not deductible because the total debt on the residence exceeds $375,000.

C)

As home equity debt, the interest is not deductible.

D)

The interest on the debt is deductible because the debt was incurred to improve the residence, and the total indebtedness does not exceed $750,000.