Question

During 2018, Cary and Bill incurred acquisition debt on their residence of $1,300,000. They also borrowed $200,000 on a home equity line to pay college tuitions for their children. On a joint tax return, what is the amount of their qualified acquisition debt?

A) None of the aboveB) $1,500,000C) $750,000D) $1,000,000E) $1,300,000

Answer 1

The correct amount here is C) $750,000 .

Step-by-step explanation:

The acquisition debt is a financial obligation which is incurred by a person when a primary or secondary residence is purchased or even if any improvement is being made to the residence. The IRS has given certain tax advantages as per the tax cuts and job act , where the home owners are allowed a deduction up to $750,000 on the home loans.