In 2006,Ross,who Is Single,purchased a Personal Residence for $170,000 and Took

question 145

Essay

In 2006,Ross,who is single,purchased a personal residence for $170,000 and took out a mortgage of $100,000 on the property.In May of the current year,when the residence had a fair market value of $220,000 and Ross owed $70,000 on the mortgage,he took out a home equity loan for $110,000.He used the funds to purchase a BMW for himself and a Lexus SUV for his wife.For both vehicles,100% of the use is for personal activities.What is the maximum amount on which Ross can deduct home equity interest?

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Definitions:

Cash Paid for Wages

The amount of money disbursed by a company to its employees as compensation for labor.

Acquire Land

The action or process of obtaining ownership of land, often for business expansion, development, or investment purposes.