This year, Randy paid $29,500 of interest on his residence.

This year, Randy paid $29,500 of interest on his residence. (Randy borrowed $630,000 to buy his residence, which is currently worth $700,000) Randy also paid $3,000 of interest on his car loan and $4,950 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?

a. Randy received $2.600 of interest this year and no other investment income or expenses. His AGI is $75,000

Expert Solution

Interest deduction = $29,500 + $2,600

= $32,100

Interest deduction = $32,100

Explanation :-

Randy can deduct $32,100.
The enthusiasm on the vehicle credit is nondeductible individual premium yet Randy may deduct all $29,500 of his enthusiasm on the home advance as an ordered deduction.
The $4,950 of edge premium is likely venture premium, and this organized reasoning is restricted to net speculation income.
Because the $2,600 of premium salary qualifies as speculation pay and Randy obviously has no other venture costs, the venture premium cost would be constrained to his $2,600 in net speculation pay.

ekkarill92 answered 2 years ago

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