Patrick purchased a home on January 1, year 2018 for $600,000 by making a down payment of $100,000 and financing the remaining $500,000 with a 30-year loan, secured by the residence, at 6 percent. During 2018, Patrick made interest-only payments on the loan of $30,000. On July 1, 2018, when his home was worth $600,000 Patrick borrowed an additional $75,000 secured by the home at an interest rate of 8 percent. During 2018, he made interest-only payments on this loan in the amount of $3,000. What amount of the $33,000 interest expense Patrick paid during 2018 may he deduct as an itemized deduction if he used the $75,000 from the July 1 loan to purchase a car?
a.) $0
b.) $3,000
c.) $30,000
d.) $33,000
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Patrick purchased a home on January 1, year 2018 for $600,000 by making a down payment of $100,000 and financing the remaining $500,000 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Which sentences describe characteristics of a sole proprietorship?
Answers (1)
alberta company accepts a credit card as payment for $450 of services provided for the customer. the credit card company charges a 4% fee for handling the transaction. how does this this transaction affect the elements of the financial statements
Answers (1)
When is a firm insolvent from an accounting perspective? A. When the firm is unable to meet its financial obligations in a timely mannerB. When the firm's debt exceeds the value of the firm's equityC. When the firm has a negative net worthD.
Answers (1)
The Guitar Shoppe reports the following sales forecast: August, $130,000; and September, $230,000. Total sales include 35% cash sales, 50% of credit sales collected in the month following sale, and the remaining 15% credit sales written off as
Answers (1)
Randie company lends luann company $10,000 on april 1, accepting a four-month, 6% interest note. randie company prepares financial statements on april 30. what adjusting entry should be made before the financial statements can be prepared?
Answers (1)
New Questions in Business
Which of the following transactions would be recorded if using the accrual basis of accounting but not if using the cash basis of accounting? A. Paying off loans B. Purchasing inventory on account C. Collecting customer payments D. Borrowing money
Answers (2)
Under ASC 606, the transaction price generally should be adjusted for the effect of the time value of money when A. A royalty contract with a distribution in which the consideration to be received depends on sales to end customers. B.
Answers (1)
ALT Inc. conducts periodic reviews of the distribution of pay and the favorable outcomes granted to employees, such as promotions and increased office space.
Answers (1)
If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner's equity amount? A. Decrease of $2,000 B. Decrease of $2,000 C. Increase of $10,000 D. Decrease of $10,000
Answers (1)
You are invited to go to the mall with a new group of friends from school. you don't know them that well, but are excited that they included you in their plans.
Answers (1)