Question 17:

Kevin and Nina, a married couple, have investment income interest and dividends in the amount of $14,000 (Form 1099-INT) .They invested by borrowing stock against their brokerage account . During the year, they paid margin interest of $16,000 and home mortgage interest of $12,000 .They also obtained a home equity loan to build a new room and paid interest of $3,000 on a $50,000 loan, credit card interest of $4,500, and had automobile loan interest of $2,000 .They have no other tax-exempt investments .What amount can they report for interest deductions, after limitations, on their 2020 tax return?

a) $29,000

b) $37,500

c) $15,000

d) $31,000

Question 18:

Betty Brown purchased a new townhome in Sacramento on March 1st of 2020, she attained a mortgage loan for $759,000. She was promptly advised by her mortgage loan officer that she could deduct the home-mortgage interest of her new townhome . Betty is planning ahead and has questions about the new limitations regarding the deduction of mortgage interest on her tax return .According to the latest tax law, which of the following options will affect Betty the most? (Best option)

a) Betty may claim a mortgage interest deduction on her primary home (townhome)

b) Betty may claim a mortgage interest deduction on her second home .

c) Betty may claim a mortgage interest deduction on her existing home mortgage, limited to $750,000 .

d) Betty may deduct a secured home-equity line of credit.