On July 1 of the current year,Marcia purchases a small office building to use in her business and borrows $320,000.Marcia is required to pay two points on the loan.The loan is secured by the property and the charging of points is an established business practice in the area.The term of the loan is 20 years,beginning on July 1 of the current year.How much,if any,of the points may Marcia deduct in the current year?

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Points are typically fees that are charged as a percentage of the loan amount, and they are generally deductible over the life of the loan. In this case, Marcia was charged two points on a $320,000 loan, which would amount to $6,400. However, she can only deduct a portion of that amount in the current year. The general rule is that points paid on a loan to purchase a business property must be capitalized and amortized over the life of the loan. However, there is an exception when the loan is for acquisition indebtedness of $1 million or less ($500,000 or less for married individuals filing separately) and is secured by the property. In that case, the taxpayer can elect to deduct the points in the year they were paid. Since Marcia's loan is less than $1 million and is secured by the property, she can elect to deduct the points in the current year. Two points on a $320,000 loan would be $6,400, and deducting that amount would be significant. However, since the question only asks about the amount that can be deducted in the current year, the answer is $160. This is because Marcia paid two points, which is 2% of the loan amount, so she can deduct 2% of $320,000, or $6,400, over the life of the loan. In the current year, she can deduct 1/20th of that amount, or $320/20=$<<6400/20=320>>320. Since she already paid $160 in points, she can deduct that full amount in the current year.

On July 1 of the Current Year,Marcia Purchases a Small