Taxpayer will deduct an interest expense

Assignment Help Taxation

Reference no: EM1375418

1. A taxpayer uses his mother's line of credit to pay for expenses related to a rental property. The mother paid interest of $670 during tax year, $240 of which she calculated pertained to the taxpayer's use of credit line. The taxpayer will deduct an interest expense:
A. $240
B. $0
C. $670
D. any amount up to $240
E. none of the above

2.Roy incurred interest on investment loans as given:
$2,500 related to an investment in a corporation which has not yet paid dividends.
$575 on a loan taken out to get the shares of a U.S. corporation which paid Roy dividends in the year.
Roy can deduct this year:
A. none of the above
B. $0
C. $3,075
D. $2,500
E. $575

Reference no: EM1375418

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