Hank, Whose Adjusted Gross Income Is $100,000, Purchases a New

question 27

Multiple Choice

Hank, whose adjusted gross income is $100,000, purchases a new principal residence in the current year for $250,000. He borrows $220,000 from a local mortgage company and pays loan origination fees of $1,600 and mortgage insurance premiums of $1,500. During the year, Hank pays $7,000 of interest on the loan. What is Hank's allowable interest deduction for the year?

• A) $ 7,000
• B) $ 7,750
• C) $ 8,500
• D) $ 8,600
• E) $10,100

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