Reference no: EM13576812

1: Janet and James purchased their personal residence 15 years ago for 300,000. For the current year, they have an 80,000 first mortgage on their home, on which they paid 5,600 in interest. They also have a home equity loan secured by their home with a balance throughout the year of 150,000. They paid interest on the home equity loan of 12,000 for the year. Calculate the amount of their deduction for interest paid on qualified residence acquisition debt and qualified home equity debt for 2013.

2: Mark own his home and has a 250,000 mortgage related to his purchase if the residence. When his daughter went to college in the fall of 2013, he borrowed 20,000 through home equity loan on his house to help pay for her education. The interest expense on the main mortgage is 15,000 and the interest expense in the home equity loan is 1,500. How much of the interest is deductible as an itemized deduction and why?

3: Dan has a 20 year old vintage car behind his residence. He rarely used it. This year he discovered that it has been completely destroyed by rust. The car originally cost 5,000 and has a fair market value of that amount before the rust destroyed it. Dan has 25,000 of adjusted gross income. What is his casualty loss? Please explain.