On January 1, 2019, Katie Sperry, CEO of profitable Halsey Comet Corp., lent $1,000,000 of Katies own cash to her 35 year-old brother Billy Ierish, CPA. Billy used the entire $1,000,000 to buy a condo apartment where Billy will live. The interest rate on the 10-year loan is listed as 0% (zero) in the loan documents. The loan is payable in full (i.e., $1,000,000) on December 31, 2028 and Katie is prepared to sue if necessary to collect the $1,000,000 payment and Katie even recorded a mortgage on the apartment to protect Katies rights in case Billy tried to sell the apartment (i.e., the loan itself is fully respected as a valid loan by the IRS). Assume the appropriate (i.e., market, IRS-sanctioned) interest rate is 5% per year (ignore compounding). As a result of the above, how much of an interest deduction can Billy take to arrive at AGI for 2019?

a. 1,050,000 b. 50,000 c. 2,000,000 d. zero