Question

Helen paid the following amounts of interest during the 2022 tax year: line item descriptionamount mortgage interest on dallas residence (loan balance $50,000)$1,600 automobile loan interest (personal use only)440 mortgage interest on vail residence (loan balance $50,000)3,100 student loan interest775 calculate the amount of helen's itemized deduction for interest (after limitations, if any) for 2022?

Answer 1

Helen's itemized deduction for interest for the 2022 tax year is $5,915.

Step-by-step explanation:

To calculate Helen's itemized deduction for interest for the 2022 tax year, we need to consider the limitations on mortgage interest deductions. For the mortgage interest on the Dallas residence and the Vail residence, the deduction is limited to the interest paid on up to $750,000 of acquisition debt. Since the loan balance for both properties is $50,000 each, the total deduction for these two properties would be $1,600 + $3,100 = $4,700.

For the automobile loan interest and student loan interest, the deduction may be subject to certain limitations based on Helen's income. However, assuming no limitations, the total deduction for these two items would be $440 + $775 = $1,215.

Therefore, Helen's itemized deduction for interest (after limitations, if any) for 2022 would be $4,700 + $1,215 = $5,915.