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What amount may he deduct as interest

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Question - George recently received a great stock tip from his friend, Mason. George didn't have any cash on hand to invest, so he decided to take out a $24,000 loan to facilitate the stock acquisition. The loan terms are 8 percent interest with interest-only payments due each year for five years. At the end of the five-year period the entire loan principal is due. When George closed on the loan on April 1, 2018, he decided to invest $21,600 in stock and to use the remaining $2,400 to purchase a four-wheel recreation vehicle. George is unsure how he will treat the interest paid on the $24,000 loan. In 2018, George paid $1,440 interest expense on the loan.

What amount may he deduct as interest in 2018?

Reference no: EM132251408

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