This year Randy paid $28,000 of interest on his residence. (Randy borrowed $450,000 to buy his residence, which is currently worth $500,000.) Randy also paid $2,500 of interest on his car loan and $4,200 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances? Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000
This year Randy paid $28,000 of interest on his residence. (Randy borrowed $450,000 to buy his residence, which is currently worth $500,000.) Randy also paid $2,500 of interest on his car loan and $4,200 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances?
Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.
An itemized deduction seems to be an expenditure that could be deducted from your adjusted gross income (AGI) for decrease your taxable income and hence your tax liability. Taxpayers who qualifying can use these deductions to pay less in taxes than if they used the standard deduction, which is a set cash amount that changes depending on filing status.
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