On March 31, year 1, Mary borrowed $190,000 to buy her principal residence. Mary paid 2 points to reduce her interest rate from 5 percent to 4 percent. The loan is for a 30-year period. What is Mary's year 1 deductionfor her points paid?Multiple ChoiceO$32$190$2.850$3,800

Deduction refers to the process of subtracting certain expenses or allowances from one's taxable…

Answered: What is Mary's year 1 deduction

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 1 (Marks - 10) Calculate Total Assessable Income, Taxable Income, Tax Liability, Student loan (HECS), Medicare Levy, and Medicare Levy Surcharge if applicable, for the taxpayer (Susanne) with the information below: • Susanne is a single and an Australian resident plans to lodge a tax return for the tax year 2020 - 2021. • Her total taxable income is $90,000 (Including tax withheld). • She does not have private health insurance. • Susanne has a student loan HECS outstanding for her previous study at Sydney University of $53,000. • Her employer pays superannuation guarantee charge of 9.5% on top of her salary to her nominated fund. • Susanne earned a passive income of $10,000 from the investments in shares in the same tax year.
Alicia and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (six weeks) at $890 per week and used it for personal use for 58 days. The total costs of maintaining the home are as follows: Hortgage interest Property taxes Insurance utilities Repairs Depreciation Required: a. What is the proper tax treatment of this information on their tax return using the Tax Court method? Note: Use 365 days in a year. Round your intermediate computations to 5 decimal places and final answers to nearest whole dollar value. Income Mortgage interest Property taxes Insurance Uits Repairs Show Transcribed Text Repairs Depreciation Net income $ Tex court method IRS method Schedule E $4,200 700 1,200 3,200 1,900 5,500 Direct allocation method i Appropriation method Oral mathe Schedule A b. Are there options available for how to allocate the expenses between personal and rental use? Note: You may select more than one answer. Single click the box with the question mark…
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