Question

Patricia purchased a home on January 1, 2017 for $1,200,000 by making a down payment of $100,000 and financing the remaining $1,100,000 with a 30-year loan, secured by the residence, at 6 percent. During year 2017 and 2018, Patricia made interest-only payments on the loan of $66,000. What amount of the $66,000 interest expense Patricia paid during 2018 may she deduct as an itemized deduction? (Assume not married filing separately.)

A. $66,000.

B. $6,000.

C. $0.

D. $60,000.

Answer 1

Mortgage interest payments are typically tax-deductible, but without specific tax law and individual’s financial information, it is not possible to determine the exact deductible amount.option a.

Step-by-step explanation:

The question asks about the deductibility of interest expense from a home loan as an itemized deduction on tax returns. Patricia paid $66,000 in interest-only payments during the years 2017 and 2018 for her home loan. Without considering the tax implications of this particular individual beyond the provided details, it is difficult to determine the exact deductible amount.

However, under typical circumstances, interest payments on a mortgage are generally deductible as an itemized deduction on a taxpayer’s return. To provide a specific answer, additional information regarding tax law changes, income level, and loan structuring would be necessary.

As tax laws and deduction limits can vary year by year and are subject to various income thresholds and phaseouts, it is recommended to consult the current IRS guidelines or a tax professional for the most accurate and personalized answer.