Ted,who Is Single,owns a Personal Residence in the City

question 110

Multiple Choice

Ted,who is single,owns a personal residence in the city.He also owns a condo near the ocean.He uses the condo as a vacation home.In March 2012,he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During 2012,he paid the following amounts of interest: What amount,if any,must Ted recognize as an AMT adjustment in 2012?

• A) $0.
• B) $4,800.
• C) $6,200.
• D) $11,000.
• E) None of the above.

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Definitions:

Note Balance

The remaining amount owed on a promissory note after payments have been made.

Refinancing

Replacing an old loan with a new loan, typically with better terms, such as a lower interest rate.

Loss Contingency

A potential financial loss to a company that might occur in the future due to past events or transactions, depending on the outcome of uncertain future events.

Range

The difference between the highest and lowest values in a set of numbers, indicating the spread or dispersion.