Patricia purchased a home on January 1, year 1 for $1,200,000 by making a down payment of $100,000 and financing the remaining $1,100,000 with a 30-year loan, secured by the residence, at 6 percent. During year 1, Patricia made interest-onlypayments on the loan of $66,000. What amount of the $66,000 interest expense Patricia paid during year 1 may she deduct as an itemized deduction?

Question

Quizplus · Accepted Answer

Patricia can deduct the full $66,000 as an itemized deduction because it is interest paid on a mortgage for a primary residence, which is generally deductible under U.S. tax law.

Patricia Purchased a Home on January 1, Year 1 for $1,200,000