22. Margaret Lindley paid $15,060 of interest on her $300,600 acquisition debt f
ID: 2591056 • Letter: 2
Question
22. Margaret Lindley paid $15,060 of interest on her $300,600 acquisition debt for her home (fair market value of $500,600), $4,060 of interest on her $30,060 home-equity loan, $1,060 of credit card interest, and $3,060 of margin interest for the purchase of stock. Assume that Margaret Lindley has $10,060 of interest income this year and no investment expenses. How much of the interest expense may she deduct this year?
Multiple Choice
$22,180.
$19,120.
None of the choices are correct.
$23,240.
$18,120.
23. Grace is employed as the manager of a sandwich shop. This year she earned a salary of $45,800 and incurred the following expenses associated with her employment:
What amount of miscellaneous itemized deductions can Grace claim on Schedule A if these are her only miscellaneous itemized deductions?
Multiple Choice
$1,330.
$710.
None of the choices are correct.
$190.
$240 if Grace was reimbursed $90 for her cooking class.
Subscriptions to food publications $380 Cooking class (“How to make better subs”) 330 Transportation between Grace’s home and the shop 620Explanation / Answer
22.
$15,060 of interest on acquisition debt for her home and $4,060 of interest on her home-equity loan can be deducted as qualified residence interest and $3,060 of margin interest for the purchase of stock is deductible as investment interest.
Credit card interest is a personal interest so cannot be deducted.
Therefore,
Interest expense that can be deducted this year = $15,060 + $4,060 + $3,060 = $22,180
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