Please help me answer the following questions in correspondence with 2016 tax la

Question

Please help me answer the following questions in correspondence with 2016 tax laws:

John has mortgage on his principle residence of $500,000 and paid interest on the mortgage of $25,000 during 2015. The mortgage qualifies as acquisition indebtedness. John also, has two vacation homes with mortgages of $200,000 and $250,000 in which he paid $10,000 and $15,000 interest, respectively. Both mortgages on the vacation properties are qualified residential interest. What is the total amount of home interest deduction?

a.) $40,000

b.) $25,000

c.) $50,000

d.) $35,000

e.) None of the above

Explanation / Answer

Total home interest deduction will only be the amount of interest paid on vacation homes viz. $ 25,000 since the principle residence does not qualify for deductions per the tax laws applicable.

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