Richie Rominey purchases a new $4.3 million qualified principal residence in Palo Alto,California using a mortgage loan of $3 million.Richie's mortgage interest deduction may be limited.

Question

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The mortgage interest deduction for qualified principal residences is subject to certain limits, including a cap on the amount of mortgage debt that is eligible for the deduction. In 2021, the cap is $750,000 for new mortgages, so Richie's deduction may be limited since his mortgage loan is greater than that amount.

Richie Rominey Purchases a New $4