This Year, Benjamin Hassell Paid $20,000 of Interest on a Mortgage

question 57

Essay

This year, Benjamin Hassell paid $20,000 of interest on a mortgage on his home (Benjamin borrowed $600,000 in 2015 to buy the residence and it is currently worth $1,000,000), $12,000 on a $150,000 home-equity loan on his home, and $10,000 of interest on a mortgage on his vacation home (loan of $300,000; home purchased for $400,000 in 2016; home is not rented out at any time). How much interest expense can Benjamin deduct as an itemized deduction?

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Definitions:

Product Failure Rate

The frequency at which an engineered system or component fails, expressed in failures per unit of time.

MTBF

Mean Time Between Failures, a measure of reliability for a system or product, indicating the average time between failures.

Breakdown Costs Model

A model that analyzes the costs associated with equipment or system failures, including repair, loss of productivity, and impacts on downstream processes.