Question

Jerry and Ann paid the following amounts during the current year: Interest on automobile loan $1,500 Interest on bank loan (proceeds were used to purchase municipal bonds) $5,000 Qualified home mortgage interest $3,150 What is the maximum amount they can use as interest expense in calculating itemized deductions for the current year

Answer 1

the maximum amount is $3,150

Step-by-step explanation:

The computation of the maximum amount that could be used as an interest expenses while calculating the item deductions for the present year is shown below:

Here we considered only the home mortgage interest i.e. qualified i.e. $3,500

The other things would not be considered like interest on automobile loan, interest on bank loan etc as it is not allowed

Therefore the maximum amount is $3,150