Rafael and Sandra Gonzalez purchased a home on January 1 of year 1 for $400,000 by paying $40,000 down and borrowing the remaining $360,000 with a 6 percent loan secured by the home.The loan requires interest-only payments for the first five years.In year 2,when the home was valued at $400,000,Rafael and Sandra took out a second loan secured by the home for $80,000 to fund expenses unrelated to the home.The interest rate on the second loan is 8 percent.In year 2,Rafael and Sandra paid $21,600 of interest expense on the first loan and $6,400 of interest on the second loan.What is the maximum amount of the $28,000 of interest expense may Rafael and Sandra deduct in year 2?

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The Answer of Rafael and Sandra Gonzalez purchased a home on January 1 of year 1 for $400,000 by paying $40,000 down and borrowing the remaining $360,000 with a 6 percent loan secured by the home.The loan requires interest-only payments for the first five years.In year 2,when the home was valued at $400,000,Rafael and Sandra took out a second loan secured by the home for $80,000 to fund expenses unrelated to the home.The interest rate on the second loan is 8 percent.In year 2,Rafael and Sandra paid $21,600 of interest expense on the first loan and $6,400 of interest on the second loan.What is the maximum amount of the $28,000 of interest expense may Rafael and Sandra deduct in year 2?

Rafael and Sandra Gonzalez Purchased a Home on January 1