The Thompsons currently have a mortgage on their home with a…
The Thompsons currently have a mortgage on their home with a balance is $875,000. Mortgage rates have recently dropped and they are considering refinancing their mortgage to save on the interest and potentially increasing the amount refinanced to pay off credit card debt. Which of the following statements would you tell the Thompsons in regards to the above facts? 1. The Thompsons can refinance the credit card debt into the refinanced mortgage and deduct the full amount of the interest.2. The Thompsons can refinance the existing $875,000 mortgage and deduct the interest on the entire amount.3. The Thompsons can take out a home equity loan their credit card debt and can fully deduct the interest.
Read DetailsGrace obtained a first mortgage loan this year from her moth…
Grace obtained a first mortgage loan this year from her mother, Angela, in the amount of $200,000 to acquire a home. The loan’s interest rate is 1%, with a 30 year amortization schedule of monthly payments. The Applicable Federal Rate for interest on this type of loan is 5%. Which of the following statements is (are) true? I. Grace will be able to claim an interest expense deduction for interest on a qualified residence, if she itemizes deductions II. Angela is required to report interest income based on an IRS schedule of rates, rather than the 1% rate charged to Grace.
Read DetailsIf deductions are itemized, which of the following statement…
If deductions are itemized, which of the following statements is true for tax year 2024 & 2025:I. A taxpayer may deduct interest expense to create taxable and nontaxable investment income.II. A taxpayer may deduct the full amount of both state income taxes and property taxes without limitation.III. A taxpayer may deduct both interest and points paid on a $750,000 mortgage.
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