Ted,who is single,owns a personal residence in the city.He also owns a condo near the ocean.He uses the condo as a vacation home.In March 2016,he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During 2016,he paid the following amounts of interest.

∙
On his personal residence
$15,500
∙
On the condo
6,200
∙
On the home equity loan
4,800
∙
On credit card obligations
1,700
What amount,if any,must Ted recognize as an AMT adjustment in 2016?
A)$0
B)$4,800
C)$6,200
D)$11,000
E)None of the above

Question

Ted,who is single,owns a personal residence in the city.He also owns a condo near the ocean.He uses the condo as a vacation home.In March 2016,he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During 2016,he paid the following amounts of interest.
​
∙
On his personal residence
$15,500
∙
On the condo
6,200
∙
On the home equity loan
4,800
∙
On credit card obligations
1,700
What amount,if any,must Ted recognize as an AMT adjustment in 2016?
A)$0
B)$4,800
C)$6,200
D)$11,000
E)None of the above

Quizplus · Accepted Answer

The interest on the home equity loan used to acquire a luxury automobile is not deductible for AMT purposes, so Ted must recognize a $4,800 AMT adjustment.

Ted,who Is Single,owns a Personal Residence in the City