Matthew Purchases a New Principal Residence in 2014 and Pays

question 60

Multiple Choice

Matthew purchases a new principal residence in 2014 and pays points of $2,000 to obtain a mortgage loan. What is the proper tax treatment for the points paid?

• A)The points are a nondeductible personal expense.
• B)The points must be amortized over the life of the loan.
• C)The points are fully deductible in 2014.
• D)The points must be capitalized into the cost of the residence.
• E)The points must be amortized over 5 years.

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Definitions:

Behavioral Intentions

refer to the motivational factors that influence an individual's preparedness to perform a particular behavior or action.

Cluster Of Beliefs

A set of closely related attitudes or values held by an individual or group regarding a specific topic or issue.

Emotions

Complex psychological states that involve three distinct components: a subjective experience, a physiological response, and a behavioral or expressive response.

Logical Analysis

The systematic examination of arguments and information by distinguishing between valid and fallacious reasoning.