A taxpayer has a mortgage with a total value of $1,500,000 and a home equity loan of $250,000 that were finalized in TY2018. The total interest paid during the year was$54,000 for the mortgage and $9,000 for the home equity loan. What amount of these interest totals can be deducted?1. Half the mortgage ($750k indebtedness limit) and 40% of the equity loan ($100k indebtedness limit) for a total of $36,0002. The full value of $63,0003. Half the mortgage ($750k indebtedness limt) and none of the home equity loan for a total of $27,0004. Two-thirds of the mortgage value ($1m indebtedness limit) and 40% of the home equity loan ($100k indebtedness limit) for a total of $39,600

Interest on mortgages is deductible up to a certain limit.For home equity loans received before…

Answered: A taxpayer has a mortgage with a total…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The monthly mortgage payment on Flynn‘s home is 690,084. Additionally they pay 1,598.57 in annual Real estate taxes and $627 per year in homeowners insurance what is the total amount of their entire monthly payment
Your brother's business obtained a 30-year amortized mortgage loan for $300,000 at a nominal annual rate of 7.0%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for Year 1? Oa. $20,903.46 O b. $19,169.71 O c. $3,047.43 O d. $21,000.00 O e. $23,950.89
Assume that the prescribed rate for each quarter last year was 4%. Gerry received a loan from his employer of $60,000 at 2%, which he put towards a rental property he purchased for $120,000. He paid the balance in cash. What was his taxable benefit last year as a result of the loan that he obtained from his employer? a) $0 b) $600 c) $1,200 d) $2,400 Alan Peterson made a $2,000 RRSP contribution this year, and his marginal tax rate is 29%. Next year, Alan expects to get a significant raise, such that his marginal tax rate will increase to 43%. The Income Tax Act allows him to deduct his RRSP contribution this year, or to carry the deduction forward to future years. When should he claim the deduction to optimize the tax benefits? a) He should claim the deduction this year. b) He should claim the deduction next year. c) It does not matter when he claims the deduction because it will result in the same tax reduction in either year. d) He should split the deduction between his tax returns…
Please use microsoft excel for calculations.
Greg owes two debt payments – a payment of $5763 that was due in 10 months ago and a payment of $1916 due in 7 months. If Greg makes a payment now, what would this payment be if money is worth 7.12% compounded semi-annually? Assume a focal date of today.
Ransford and Alda Mariano own a home recently appraised for $422,500. The balance on their existing mortgage is $113,083. If their bank is willing to loan up to 80% of the appraised value, what is the amount of credit available to them (in $)? $
The Zusi's sign a $300,000.00 mortgage, 2-year term, monthly payments at 7% c.m., amortized over 30 years. Payments 19 and 20 are missed (due to loss of income from some lousy pandemic). Calculate the balance owing at the end of the term.
Your brother's business obtained a 30-year amortized mortgage loan for $175,000 at a nominal annual rate of 7.4%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for Year 1? a. $1,645.03 b. $14,539.98 c. $12,950.00 d. $11,825.05 e. $12,894.95
The Hills obtain a 30-year, $144,000 conventional mortgage at a 4.5% rate on a house selling for $180,000. Their monthly mortgage payment, including principal and interest, is $729.63. They also pay 2 points at closing. Determine the total amount the Hills will pay for their house over 30 years. The total amount is $ (Round to the nearest cent as needed.)
Please do not answer this question in excel thank you in advance. Nell has a 30-year mortgage of $403,897. Nell qualifies for a 2.88% loan. Annual property taxes are $2,548 and annual insurance is $1,412. Calculate Nell's monthly PITI payment.

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS