During the current year, Horace paid the following interest charges: Home mortga
ID: 2432215 • Letter: D
Question
During the current year, Horace paid the following interest charges:
Home mortgage $3,600
On loan to purchase household furniture 400
On loan to purchase state of Nebraska
general purpose bonds (wholly tax-exempt) 600
If Horace itemizes his deductions from AGI for the current year, the amount deductible as interest expense is:
$4,600
$4,000
$3,600
$4,200
None of the above.
a.$4,600
b.$4,000
c.$3,600
d.$4,200
e.None of the above.
Explanation / Answer
Interest not allowed as itemized deduction including personal interest. Interest relating to tax exempt income Interest paid on loan to purchase personal property Qualified mortgage Interest is one which is used to pay loan secured by first or second home . Ans( c ) So Horace itemized his deduction of AGI for the current year=$3600(Interest on Home Mortagage loan)
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