Please answer the following scenarios regarding deductions:

1-13. Patricia purchased a home on January 1, 2017, for $1,260,000 by making a down payment of $100,000 and financing the remaining $1,160,000 with a loan, secured by the residence, at 6 percent. From 2017 through 2022, Patricia made interest-only payments on the loan each year in the amount of $69,600. What amount of the $69,600 interest expense that Patricia paid during 2022 may she deduct as an itemized deduction? (Assume not married filing separately.)

Multiple Choice

• $0
• $9,600
• $60,000
• $69,600

1-14. Jessica purchased a home on January 1, 2022, for $720,000 by making a down payment of $290,000 and financing the remaining $430,000 with a loan, secured by the residence, at 6 percent. During 2022 and 2023, Jessica made interest-only payments on this loan of $25,800 (each year). On July 1, 2022, when her home was worth $720,000, Jessica borrowed an additional $180,000 secured by the home at an interest rate of 8 percent. During 2022, she made interest-only payments on the second loan in the amount of $7,200. During 2023, she made interest-only payments on the second loan in the amount of $14,400. What is the maximum amount of the $40,200 interest expense Jessica paid during 2023 that she may deduct as an itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard? (Assume not married filing separately.)

Multiple Choice

• $0
• $14,400
• $37,835
• $8,400
• $40,200

1-15. Amanda purchased a home for $880,000 in 2016. She paid $176,000 cash and borrowed the remaining $704,000. This is Amanda's only residence. Assume that in year 2024, when the home had appreciated to $1,320,000 and the remaining mortgage was $528,000, interest rates declined, and Amanda refinanced her home. She borrowed $880,000 at the time of the refinancing, paid off the first mortgage, and used the remainder for purposes unrelated to the home. What is her total amount of acquisition indebtedness for the purposes of determining the deduction for home mortgage interest? (Assume not married filing separately.)

Multiple Choice

• $528,000
• $660,000
• $880,000
• $968,000

1-16. On March 31, year 1, Mary borrowed $120,000 to buy her principal residence. Mary paid 3 points to reduce her interest rate from 6 percent to 5 percent. The loan is for a 30-year period. What is Mary's year 1 deduction for her points paid?

Multiple Choice

• $30
• $120
• $2,700
• $3,600

1-17. On April 1, year 1, Mary borrowed $190,000 to refinance the original mortgage on her principal residence. Mary paid 2 points to reduce her interest rate from 5 percent to 4 percent. The loan is for a 30-year period. How much can Mary deduct in year 1 for her points paid?

Multiple Choice

• $95
• $127
• $2,850
• $3,800

1-18. On July 1 of year 1, Elaine purchased a new home for $760,000. At the time of the purchase, it was estimated that the property tax bill on the home for the year would be $15,200 ($760,000 2%). On the settlement statement, Elaine was charged $7,600 for the year in property taxes and the seller was charged $7,600. On December 31, year 1, Elaine discovered that the real property taxes on the home for the year were actually $16,200. Elaine wrote a $16,200 check to the local government to pay the taxes for that calendar year. (Elaine was liable for the taxes because she owned the property when they became due.) What amount of real property taxes is Elaine allowed to deduct for year 1? (Assume not married filing separately.)

Multiple Choice

• $8,100
• $0
• $8,600
• $7,600
• $16,200

1-19. Harvey rents his second home. During the year, Harvey reported a net loss of $56,000 from the rental. If Harvey is an active participant in the rental and his AGI is $98,400, how much of the loss can he deduct against ordinary income for the year?

Multiple Choice

• $56,000
• $25,000
• $15,500
• $0

1-20. Ilene rents a property for the entire year. During the year, Ilene reported a net loss of $10,500 from the rental. If Ilene is an active participant in the rental and her AGI is $137,500, how much of the loss can she deduct against ordinary income in the year?

Multiple Choice

• $10,500
• $4,250
• $6,250
• $0