19. Aiden and Brittney bought a house together on September 3, 2018. They paid $

Question

19. Aiden and Brittney bought a house together on September 3, 2018. They paid $25,000 down on their house and took out a 30-year fixed mortgage loan of $275,000 with a 3.92% interest rate. In 2018, they will pay $3,585.44 in mortgage interest on their primary residence. They also have a HELOC (home equity line of credit) on their secondary residence to help pay off credit card debt. In 2018, they will pay $1,345 worth of HELOC interest. In 2018, how much interest can be deducted on Schedule A? (1 pt)

Explanation / Answer

Interest on loan taken to acquire home is deductible subject to certain limits. But interest on home equity loan taken to pay off credit card debt now is not deductible.

Thus, interest deduction on schedule A related to the home loan is $3,585.44

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