During the current year, Trisha purchases a beachfront condominium for $625,000,

Question

During the current year, Trisha purchases a beachfront condominium for $625,000, paying $110,000 down and taking out a $515,000 mortgage, secured by the property. At the time of the purchase, the outstanding mortgage on her principal residence is S750 000. This de t is secured by the residence and the F MV?h inci a residence s s, 00000 e r has the principal residence in 1997 Requirement What is the amount of qualified indebtedness on which Trisha may deduct the interest payments? The amount of qualified indebtedness on which Trisha may deduct the interest payments is

Explanation / Answer

The amount of qualified indebtedness on which Trisha may deduct the interest payments: =$515000+$750000 =$12,65,000 or statue limit of $1,000,000 Which ever is lesser Hence, Qualified Mortgage indebtedness is $1,000,000

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