Wayne purchases a new home during the year, borrowing $450,000 from Century National Bank to finance the purchase. He also pays $4,500 in points and $3,500 in loan origination fees. During the year he pays interest of $18,000 on the loan. What is Wayne's allowable interest deduction?

Question

Quizplus · Accepted Answer

Wayne's allowable interest deduction is calculated as follows:
$18,000 (interest paid) + $4,500 (points) = $22,500

Wayne Purchases a New Home During the Year, Borrowing $450,000