Patrick purchased a home on January 1,year 1 for $600,000 by making a down payment of $100,000 and financing the remaining $500,000 with a 30-year loan,secured by the residence,at 6 percent.During year 1,Patrick made interest-only payments on the loan of $30,000.On July 1,year 1,when his home was worth $600,000 Patrick borrowed an additional $75,000 secured by the home at an interest rate of 8 percent.During year 1,he made interest-only payments on this loan in the amount of $3,000.What amount of the $33,000 interest expense Patrick paid during year 1 may he deduct as an itemized deduction?

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The Answer of Patrick purchased a home on January 1,year 1 for $600,000 by making a down payment of $100,000 and financing the remaining $500,000 with a 30-year loan,secured by the residence,at 6 percent.During year 1,Patrick made interest-only payments on the loan of $30,000.On July 1,year 1,when his home was worth $600,000 Patrick borrowed an additional $75,000 secured by the home at an interest rate of 8 percent.During year 1,he made interest-only payments on this loan in the amount of $3,000.What amount of the $33,000 interest expense Patrick paid during year 1 may he deduct as an itemized deduction?

Patrick Purchased a Home on January 1,year 1 for $600,000