How Did the Tax Reform Act of 1986 Increase the Appeal

question 138

Multiple Choice

How did the Tax Reform Act of 1986 increase the appeal of home equity loans?

• A)It allowed customers to borrow up to 100 percent of the value of their home.
• B)It eliminated bank income taxes from this type of loan.
• C)It protected homes under Chapter 13 bankruptcy.
• D)It allowed the difference between the market value and amount of loans against a mortgage to be used as a borrowing base.
• E)It required banks to lend on homes in the geographic area of their deposits.

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Definitions:

Federal Taxes

refer to levies imposed by the government of a country on income, property, goods, services, and activities, used to fund public services and obligations.

Government Regulation

The establishment of rules and laws by governmental bodies intended to manage and control activities within various sectors of society for public welfare.

Profit Margins

The difference between the cost to produce a good or service and its selling price, expressed as a percentage of the selling price, indicating financial health.

American Manufacturers

refers to businesses and individuals involved in the production of goods within the United States, contributing to the country's industrial and economic growth.