Colin (Age 40) Is Single and Itemizes His Deductions

question 98

Multiple Choice

Colin (age 40) is single and itemizes his deductions. His AGI is $100,000. Colin provided the following information about his cash expenditures for 2018: Interest on loan to purchase corporate securities $ 900
Interest on American Express card 1,200
Points to refinance his home at the end of December 2,600
Mortgage interest payments 11,800
Real estate taxes 2,100
State income taxes withheld on salary 5,400
Additional state income tax estimated payment 1,200
Contribution to Republican Party 2,000
Contribution to United Way 500
What is the amount of Colin's deductible interest expense if he received $600 in corporate dividends that are taxed at the 15% tax rate?

• A) $11,800
• B) $12,400
• C) $12,700
• D) $14,400

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Definitions:

Contribute

To give or supply in common with others; to add to a collective or a specific cause, project, or effort.

Benefit

Refers to a favorable or advantageous outcome derived from a specific action or situation.

Public Entertainment

Activities or performances, often provided or endorsed by government or community entities, designed for the enjoyment of the public.

Dominant Strategy

A strategy in game theory that yields the best outcome for a player, regardless of what strategies other players may choose.