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What is the amount of interest deduction allowed for the current year, assuming Marge Meyer incurred the following (assume no net investment income):Interest on loan used to purchase land for investment $18,000Interest on loan used to purchase personal residence $6,000Interest on loan used to purchase boat $500Interest on loan to purchase 100 shares of General Auto $3,000

Sagot :

Anthougoidn

Answer:

Marge Meyer

The amount of interest which Marge can deduct for the current year is:

= $27,000.

Explanation:

a) According to the IRS, the following categories of interest payments, incurred by Marge Meyer, are tax-deductible:

Interest on loan used to purchase personal residence $6,000  

Interest on loan used to purchase land for investment $18,000

Interest on loan to purchase 100 shares of General Auto $3,000

Total deductible interest expenses = $27,000

b) Note that interests for outstanding student loans are still tax-deductible.  However, interests for personal credit card, auto loan, and other personal consumer finance are not tax-deductible.

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