Rick and Carol Ryan, Married Taxpayers, Took Out a Mortgage

question 7

Multiple Choice

Rick and Carol Ryan, married taxpayers, took out a mortgage of $160,000 when purchasing their home ten years ago. In October of the current year, when the home had a fair market value of $200,000 and they owed $125,000 on the mortgage, the Ryans took out a home equity loan for $110,000. They used the funds to purchase a sailboat to be used for recreational purposes. The sailboat does not qualify as a residence. What is the maximum amount of debt on which the Ryans can deduct home equity interest?

• A)$75,000
• B)$90,000
• C)$110,000
• D)$125,000
• E)None of the above

---

Definitions:

Product Placement

A marketing strategy where branded products are placed in the context of media content, such as movies or TV shows, without explicit advertisement.

Market Anomalies

Instances where financial markets deviate from the expected or normal behavior, often leading to unexpected investment opportunities.

Advertising

The activity or profession of producing advertisements for commercial products or services, aiming to influence the buying behavior of consumers.

Inform Customers

The act of providing customers with necessary or relevant information about products, services, or changes in a timely and clear manner.