Teri pays the following interest expenses during the year: $\begin{array}{|l|r|}
\hline\text { Home mortgage interest on personal residence } & \$ 8,500 \
\hline \text { Credit card interest on personal purchases } & 550\\hline \text { Interest on loans used to purchase investments (Net investment } & \
\text { income is } \$ 2,000) & 2,400 \\hline \text { Interest on loans used for a business conducted as a sole } & \
\text { proprietorship }&3,800\
\hline\text { Interest on a credit card used exclusively in the business }&470\
\hline
\end{array}$ What is the amount of interest expense that can be deducted as an itemized deduction?
A)$10,500
B)$10,900
C)$14,300
D)$14,700

Question

Teri pays the following interest expenses during the year: $\begin{array}{|l|r|}
\hline\text { Home mortgage interest on personal residence } & \$ 8,500 \
\hline \text { Credit card interest on personal purchases } & 550\\hline \text { Interest on loans used to purchase investments (Net investment } & \
 \text { income is } \$ 2,000) & 2,400 \\hline \text { Interest on loans used for a business conducted as a sole } & \
\text { proprietorship }&3,800\
\hline\text { Interest on a credit card used exclusively in the business }&470\
\hline
\end{array}$ What is the amount of interest expense that can be deducted as an itemized deduction?
A)$10,500
B)$10,900
C)$14,300
D)$14,700

Quizplus · Accepted Answer

The deductible interest expenses as itemized deductions include home mortgage interest ($8,500) and investment interest expense up to the net investment income ($2,000). Credit card interest on personal purchases is not deductible, and business interest is deducted on Schedule C, not as an itemized deduction. Thus, the total is $8,500 + $2,000 = $10,500.

Teri Pays the Following Interest Expenses During the Year What Is the Amount of Interest Expense That Can Be