Question

JUU UUU UI TULCI SL. 15. Interest Deduction. (Obj. 4) The Greenfields' 2019 AGI is $98,500, which includes $620 of taxable interest income. They incurred the following interest expenses during the year. Credit card interest Automobile loan interest (on their older car) Mortgage interest on their main home prior to refinancing Mortgage interest on their main home after refinancing Points paid on main home refinancing ($190,000 3%) Mortgage interest on vacation home Investment interest expense on a loan to purchase corporate stocks Investment interest expense on a loan to purchase tax-exempt bonds $ 79 337 6,300 7,200 5,700 13,080 543 381 The Greenfields originally paid $260,000 for their main home. At the beginning of 2019 the home was worth $300,000 and the balance on the mortgage on their main home was $138.000. On May 1, the Greenfields refinanced the mortgage on their main home with a $190,000, 10-year loan. They used the extra proceeds to buy a new car, take a vacation, and consolidate other loans. Compute the Greenfields interest expense deduction on Schedule A.

Answer 1

SOLUTION! (Amoont in ) ANUAL ROSS INCOME - 98 500 Computation deduction of on Interest schedule expense A. • Mortgage interest on their main. home prior to de financing - 6300 • Mortgage Interest on their main home after refinancing (7200 - 5700)-1500 • Mortgage interest on vacation have 13080 & Investment interest exp to coop Stock 543 . Investment Interest exp to Bond 381 Total Deduction 21804 A Since refinancing loan interest include 5700 which is used for CAR Purchase and vacation which is mot nature of Investment.