Three years ago,Abby purchased a new home for $200,000 by making a down payment of $150,000 and financing the remaining $50,000 with a loan,secured by the residence,at 6 percent.As of January 1,2013,the outstanding balance on the loan was $40,000.On January 1,2013,when her home was worth $300,000,Abby refinanced the home by taking out a $120,000 mortgage at 5 percent.With the loan proceeds,she paid off the $40,000 balance of the existing mortgage and used the remaining $80,000 for purposes unrelated to the home.During 2013,she made interest-only payments on the new loan of $6,000.What amount of the $6,000 interest expense on the new loan can Abby deduct in 2013 on the new mortgage as home related interest expense?

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The Answer of Three years ago,Abby purchased a new home for $200,000 by making a down payment of $150,000 and financing the remaining $50,000 with a loan,secured by the residence,at 6 percent.As of January 1,2013,the outstanding balance on the loan was $40,000.On January 1,2013,when her home was worth $300,000,Abby refinanced the home by taking out a $120,000 mortgage at 5 percent.With the loan proceeds,she paid off the $40,000 balance of the existing mortgage and used the remaining $80,000 for purposes unrelated to the home.During 2013,she made interest-only payments on the new loan of $6,000.What amount of the $6,000 interest expense on the new loan can Abby deduct in 2013 on the new mortgage as home related interest expense?

Three Years Ago,Abby Purchased a New Home for $200,000 by Making