Ask Question
12 October, 17:18

This year, Randy paid $30,250 of interest on his residence. (Randy borrowed $480,000 to buy his residence, and it is currently worth $530,000.) Randy also paid $3,250 of interest on his car loan and $5,325 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances?

+5
Answers (1)
  1. 12 October, 17:36
    0
    a) Randy received $2,800 of interest this year and no other investment income or expenses. His AGI is $75,000.

    complete question

    Explanation:

    Randy can deduct $33,050 i. e. (30,250 + 2800)

    The interest on the car loan is non-deductible personal interest. However, he can deduct all $30,250 of his interest on the home loan as an itemized deduction.

    The interest margin of $5,325 is assumed to be investment interest and this itemized deduction is limited to net investment income.

    The amount of $2,800 of interest income qualifies as investment income and since, Randy has no other investment expenses, the investment interest expense would be limited to his $2,800 in net investment income.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “This year, Randy paid $30,250 of interest on his residence. (Randy borrowed $480,000 to buy his residence, and it is currently worth ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers