On July 31 of the Current Year,Marjorie Borrows $120,000 to Purchase

question 27

Multiple Choice

On July 31 of the current year,Marjorie borrows $120,000 to purchase a new fishing boat.The loan is secured by her personal residence.On the date of the loan,the outstanding balance on the original debt incurred to purchase the residence is $300,000 and the FMV of the home is $450,000.What is the total amount of debt on which Marjorie can deduct interest in the current year?

• A)$300,000
• B)$400,000
• C)$420,000
• D)$450,000

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