4. this year, benjamin hassell paid $20,000 of interest on a mortgage on his home (benjamin borrowed $600,000 in 2015 to buy the residence and it is currently worth $1,000,000), $12,000 on a $150,000 home-equity loan on his home, and $10,000 of interest on a mortgage on his vacation home (loan of $300,000; home purchased for $400,000 in 2016; home is not rented out at any time). how much interest expense can benjamin deduct as an itemized deduction?

The nterest expense can major healy deduct as an itemized deduction is $55,000.

Explanation:

total interest expense = interest on mortgage home + interest on mortgage vacation home

                                    = $40,000 + $10,000

                                     = $50,000

total amount of mortgage pf major healy = $800,000 + $200,000

                                                                   = $1,000,000

the acquisition debt does not exceed $1,000,000 so he can deduct $40,000 mortgage interest on his home and $10,000 mortgage interest on his vacation home.

interest on home equity loan = 6,000

interest on home equity load  = [home equity debt limit/home equity load]*interest on home equity load

                                                 = [100000/120000]*6000

                                                 = $5,000

Therefore, The nterest expense can major healy deduct as an itemized deduction is $55,000.

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