Qualified residence interest, Taxation

Several years ago, Magdelena purchased a new residence for $300,000. Currently, the outstanding mortgage on the residence is $260,000. The current fair value of the home is $330,000. Magdelena wants to borrow a sizable sum of money to pay for the college education costs of her two children and believes the interest would be deductible if she takes out a home equity loan.
Required:
For each of the independent situations below, determine the amount of the loan on which Magdelena may deduct the interest as qualified residence interest.
Solution
a. Magdelena borrows $50,000 as a home equity loan.
b. Magdelena borrows $80,000 as a home equity loan.
c. Alternatively, assume the current fair market value of her home is $410,000 and she borrows $110,000 as a home equity loan.
d. Alternatively, assume the current outstanding balance of the mortgage Magdelena incurred to purchase the home is $1,200,000, the home''s fair market value is $1,400,000, and she borrows $80,000 as a home equity loan.

Posted Date: 10/15/2012 9:32:59 PM | Location : United States







Related Discussions:- Qualified residence interest, Assignment Help, Ask Question on Qualified residence interest, Get Answer, Expert's Help, Qualified residence interest Discussions

Write discussion on Qualified residence interest
Your posts are moderated
Related Questions
Avis''s taxable income for the year is $300,000 and Best''s taxable income for the year is $425,000. For each of the scenarios provided, (a) state if a control group has been creat

Department of Accounting Principles of Federal Income Taxation IOWA STATE UNIVERSITY ACCT 485 (SPRING 2013) ?TO: Tax Consulting Team FROM: Jon Perkins DATE: March 26th, 2013 RE: Ta

1. Although she left her job in November of Year 1, Patrice was entitled to a year-end bonus. On December 30, her former boss called her to let her know the check was available. Pa

Explain in words and show in figures how a lump-sum government transfer can entice some workers to stop working ( and no one to start working) while a policy like EITC can entice s

what is the answer?

Miguel receives tangible personal property as an inheritance in 2011. The property was depreciated by the deceased (Miguel's father), and Miguel will also depreciate it. At the dat

Tax Liability Calculation Morgan (age 45) is single and provides more than 50% of the support of Rosalyn (a family friend), Flo (a niece, age 18), and Jerold (a nephew, age 18). Bo

Assignment 1 (from chapter 1) Ahi Corporation is one of your clients in Hawaii. The company had a good year last year and owes the IRS $100 million, due on March 15. There are no p

Can I get the answers to questions asked by others? they are on this page http://www.expertsmind.com/questions/corporate-tax-301114747.aspx#

Hi Dear, Could you please do the online exam for ( Tax Individuals US). The exam will be ( short answers and MC ). The exam will open about one and half to two hours. The exam w