Melissa and Martin McArthur incurred the following interest expenditures:

Home mortgage
$4,700
Investment loan
$840
Credit card debt
$1,425
Higher education loan
$1,460

How much will these expenditures add to their itemized deductions?

Question

Melissa and Martin McArthur incurred the following interest expenditures:
​
Home mortgage
$4,700
Investment loan
$840
Credit card debt
$1,425
Higher education loan
$1,460
​
How much will these expenditures add to their itemized deductions?

Quizplus · Accepted Answer

Only the interest on the home mortgage, investment loan, and higher education loan are deductible as itemized deductions. The total of these three interest expenditures is $7,000. However, there are limitations on the amount of home mortgage interest and investment interest that can be deducted, which brings the total down to $5,540. The interest on credit card debt is not deductible.

Melissa and Martin McArthur Incurred the Following Interest Expenditures