Paloma purchased a home with her husband, Neville, in January of 2021for $700,000. In June of 2021, Paloma and Neville separated. On December 31, 2022, they were still legally married but did not live together all year. They do not live in a community property state. Neville refused to file a joint return with Paloma. Paloma filed her return using the married filing separately filing status. Paloma is living in the home and has continued to make the mortgage payments using funds from her own account.Paloma will be itemizing her deductions. On what portion of the acquisition debt will interest be deductible on Paloma's tax return for 2022?

$0

$350,000

$375,000

$700,000