Suppose a high-income person, a middle-income person, and a low-income person purchase identical houses that are financed by similar mortgages. Who gets the largest tax benefit?

Question

Quizplus · Accepted Answer

The high-income person would receive the largest tax benefit because they are in a higher tax bracket and can deduct their mortgage interest and property taxes at a higher rate. Additionally, they may also be subject to the Alternative Minimum Tax, which decreases their tax liability even further. The middle-income and low-income persons may still receive some tax benefits, but not as high as the high-income person.

Suppose a High-Income Person, a Middle-Income Person, and a Low-Income