Which of the Following Statements Regarding the Home Mortgage Interest

question 43

Multiple Choice

Which of the following statements regarding the home mortgage interest expense deduction is correct?

• A)Taxpayers may deduct interest expense on a limited amount of home equity indebtedness, but they may deduct interest expense on an unlimited amount of home acquisition indebtedness.
• B)Taxpayers may deduct interest expense on a limited amount of acquisition indebtedness but an unlimited amount of home equity indebtedness.
• C)What a bank might call a "home equity loan" the tax laws will call acquisition indebtedness if the loan is secured by the home and the taxpayer uses the loan proceeds to substantially improve the home.
• D)None of the choices are correct.

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