Question
In each of the following cases, indicate the amount of the deduction for the current year. In each case, assume the taxpayer is a calendar
In each of the following cases, indicate the amount of the deduction for the current year. In each case, assume the taxpayer is a calendar year, cash basis taxpayer.
a. On December 31, P, wishing to reduce his current years tax liability, prepaid $3,000 of interest on his home mortgage for the first three months of the following taxable year.
b. On December 1 of this year, T obtained a $100,000 loan to purchase her residence . The loan was secured by the residence. She paid two points to obtain the loan bearing a 6% interest rate.
c. Same as (b) except the loan was used to purchase a duplex, which she will rent to others. The loan was secured by the duplex.
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