Luke Cage and Jessica Jones are the ultimate power couple. He owns and operates
ID: 377125 • Letter: L
Question
Luke Cage and Jessica Jones are the ultimate power couple. He owns and operates a bar in the San Diego area. She is a private investigator. Usually power couples involve executives, doctors, lawyers, or other high-profile professionals yet somehow these two seem all the more im They are both originally from New York-rough and tough. In the office, there is a rumor saying that they were criminals there, involved in gangs) They do not talk much about their time in New York-that's all I know They eventually moved here, San Diego, to try and live a better life. When they moved, Luke sold his bar in New York and bought the Iron Fist, a bar near Chinatown. Jessica continued her private investigator career, but in the West Coast. Fast forward five years to 2017 and Luke's bar is incredibly successful, while Jessica has uncovered more dirt on California celebrities that even Alex Jones (no relation) could ever hope for Why are they a power couple? Luke is built like "the Rock." I doubt he needs bouncers at his venue. Jessica is sharp and, believe it or not, as intimidating as Luke. At the very least, she needs no man to defend her. (I guess anyone who is willing to investigate the secrets of the rich and powerful must be pretty tough.) But I digress. Why am I telling you all this? Luke and Jessica are having a baby, Danielle Cage. Since both of their careers are going wel, hey purchased a large, comfortable home. They picked a place in La Jolla. The home purchase price was 2 million. As you know, Luke and Jessica are not married. Each of them took out a mortgage loan of 1 million and purchased the home together (the deed conveyed the home to “Luke Cage and Jessica Jones"). Once the year ends, I will prepare both of their tax returns. They each file single. (The filing status of one of them might change once the baby is born, but ignore that for now.) My question relates to the interest on those mortgage loans. I am pretty sure that mortgage interest can be deducted on home acquisition debt of up to 1 million. So, should I deduct half of the mortgage interest paid by each of the taxpayers? Please help me out.Explanation / Answer
If one is a qualified homeowner with anybody and interest on the mortgage is paid by the parties involved, each can offset their taxable income by their share of the interest paid on the mortgage.
However, the cap is a million dollar of mortgage for the year on a per taxpayer basis!
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