Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2020: Home acquisition debt interest: $15,000 Credit card interest: $5,000 Home equity loan interest (used for home improvement): $6,500 Investment interest expense: $10,000 Mortgage insurance premiums (PMI): $1,000 With 2020 net investment income of $2,000, calculate the amount of their allowable deduction for investment interest expense and their total deduction for allowable interest. Home acquisition principal and the home equity loan principal combined are less than $750,000.

SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
Publisher:YOUNG
Chapter12: Alternative Minimum Tax
Section: Chapter Questions
Problem 24CE
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Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2020:

Home acquisition debt interest: $15,000
Credit card interest: $5,000
Home equity loan interest (used for home improvement): $6,500
Investment interest expense: $10,000
Mortgage insurance premiums (PMI): $1,000

With 2020 net investment income of $2,000, calculate the amount of their allowable deduction for investment interest expense and their total deduction for allowable interest. Home acquisition principal and the home equity loan principal combined are less than $750,000.

 

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