What amount of the $20,000 interest expense is Leticia allowed to deduct in year 2021?
Leticia purchased a home on July 1, 2017, for $240,000. She paid $216,000 down and financed the remaining $24,000. On January 1, 2019, when the outstanding balance of her mortgage was $18,000 and her home was valued at $360,000, Leticia refinanced her home for $240,000. With the $240,000 loan, she paid off the remaining $18,000 balance of her original mortgage, she used $39,000 to substantially improve her home, and she used the remaining $183,000 for purposes unrelated to her home. During 2021, Leticia made interest-only payments of $20,000 on the loan. What amount of the $20,000 interest expense is Leticia allowed to deduct in year 2021? (Enter only numbers with no dollar signs or other punctuation.)
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