Which of the Following Types of Interest Are Likely to Be

question 114

Multiple Choice

Which of the following types of interest are likely to be deductible in 2018?

• A)Interest on personal credit cards
• B)Interest on a $40,000 home equity line used to buy a car
• C)Interest on a $150,000 mortgage on a principle residence
• D)Interest on a $90,000 home equity line used to pay college tuition
• E)All of the above are likely to be deductible

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Definitions:

Unrealized Holding

Refers to the increase or decrease in the value of an investment that has not yet been sold by the holder.

Realized Gains

Profits made from selling an asset at a higher price than its purchase cost, which has been actually earned and can be reported in financial statements.

Available-for-Sale Securities

Financial assets that are held for sale in the short term and which can be converted into cash, generally classified as current assets.

Fair Values

The estimated market value of an asset or liability, based on current market prices.