Darrin Owns a House with a FMV of $400,000 and Acquisition

question 26

Multiple Choice

Darrin owns a house with a FMV of $400,000 and acquisition indebtedness (first mortgage) of $250,000. He took out a home equity loan of $120,000 on the house, and used the proceeds to buy a yacht. If his interest on the home equity loan this year is $9,000, how much of the interest from the home equity loan will be deductible?

• A) $9,000
• B) $7,500
• C) $5,625
• D) $0
• E) None of the above

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Definitions:

FSH

Follicle-stimulating hormone, a gonadotropin involved in the regulation of reproductive processes including gametogenesis and ovarian follicle development.

Luteinizing Hormone

A hormone produced by the anterior pituitary gland that triggers ovulation and stimulates the production of sex hormones in both males and females.

Melatonin

Hormone (amino acid derivative) secreted by the pineal body; inhibits the secretion of gonadotropin-releasing hormone from the hypothalamus.

Photoperiod

The duration of daylight in a 24-hour period, influencing biological processes in organisms.