Sean Bought a Home in 2009 for $625,000 Financing $550,000

question 53

Multiple Choice

Sean bought a home in 2009 for $625,000 financing $550,000 of the purchase price with a 30 year mortgage.In 2013 when his existing mortgage balance was $520,000,he took out a home equity loan for $150,000.He used the proceeds to pay off credit card debt of $40,000 and purchase a car for $85,000;the balance he used to buy an engagement ring for his girlfriend.He paid $30,000 interest on the mortgage and paid interest only of $6,600 on the home equity loan.What is his deduction for qualified residential interest?

• A)$36,600
• B)$34,400
• C)$30,000
• D)$6,600
• Questions 18 through 21 are based on the following data:
• Colin (age 40)is single and itemizes his deductions.His AGI is $100,000.Colin provided the following information about his cash expenditures for 2013:
• 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

---

Definitions:

Leather Purses

Handbags made from the hide of animals, treated and fashioned into various styles and sizes.

Closest Competition

Refers to the competitors within the same industry that offer the most similar products or services to a company's offerings.

Top-Of-The-Line

Describes products, services, or goods of the highest quality available within a specific category or market segment.

Price Elasticity of Demand

A measure of how sensitive the quantity demanded of a good is to a change in its price.