In year 1, Kris purchased a new home for $680,000 by making a down payment of $544,000 and financing the remaining $136,000 with a loan, secured by the residence, at 5 percent. As of January 1, year 4, the outstanding balance on the loan was $68,000. On January 1, year 4, when his home was worth $748,000, Kris refinanced the home by taking out a $374,000 mortgage at 5 percent. With the loan proceeds, he paid off the $68,000 balance of the existing mortgage and used the remainder for purposes unrelated to the home. During year 4, he made interest only payments on the new loan of $18,700. What amount of the $18,700 interest expense on the new loan can Kris deduct in year 4 on the new mortgage as home related interest expense?