Question

8. Rent versus buy analysis - Part 1 Which Is Better: To Rent or To Buy? The decision of whether to rent or buy housing is a personal decision that is based on both your lifestyle and your finances. While most financial experts argue that the financial aspect of the decision is important, it is also important not to base your rent-or-buy decision solely on the numbers. Your personal needs and housing market conditions are important. However, it is still necessary to perform the financial analysis. Before you conduct a rent-or-buy analysis, it is critical that you understand how the U.S. tax code creates tax shelters for homeowners. incurred on your home create a The tax deductibility of the interest tax shelter for the on a mortgage and the your taxable , which and tax liability. The standard deduction for mortgage interest under the 2014 U.S. tax code is: $6,300 for single individuals and $12,600 for married couples filing jointly $5,900 for single individuals and $11,800 for married couples filing jointly $12,600 for single individuals and $6,300 for married couples filing jointly True or False: The actual amount of mortgage interest that could be deducted by most U.S. taxpaying homeowners is almost always greater than the standard interest deduction allowed by the Internal Revenue Service (IRS). This statement is false, which means that most taxpayers in this situation are better off taking the standard deduction rather than itemizing their deductions. This statement is false, which means that most homeowners are better off taking the standard deduction for mortgage interest as permitted by the IRS. This statement is true, which means that most taxpayers in this situation are better off itemizing their deductions rather than taking the standard deduction

Answer 1

The tax deductibility of the interest incurred on mortgage and the deductible expenses incurred on your home create a tax shelter for the taxpayer / home owner, which reduces / minimizes your taxable income and tax liability.

(Drop down options on above statement not available to select, but if above said options not available, please consider selecting the option, which is of same meaning as above.)

_________________________________________________________________________________________________

The standard deduction for mortgage interest under the 2015 U.S Tax code is:

= $ 6,300 for single individuals and $ 12,600 for married couples filing jointly.

(In case of year 2014, it was $ 6200 for single individuals and $ 12,400 for married couples filing jointly. Since that answer option not provided in the question above, it is assumed that this question meant for year 2015)

________________________________________________________________________________________________

This statement is true, which means that most taxpayers in this situation are better off itemizing their deductions rather than taking the standard deduction.

__________________________________________________________________________________________________