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1.
What is the maximum you can deduct for all your interest payments on mortgage debt secured by a first or second home?
$750,000 for joint returns. Note that you may not use the $750,000 deduction if you pay cash for your home and later use it as collateral for an equity loan.
2.
Which of the following is most true about home office deductions?
If you use a portion of your home exclusively for business, you may be able to deduct home costs such as repairs, depreciation, and insurance, related to that portion. Costs must be related only to the portion of the home used exclusively for business.
3.
Which of the following is true regarding home improvement loan interest?
The interest is deductible for capital improvements only. Capital improvements are those that increase your home's value, prolong its life or adapt it to new uses.
4.
A mortgage credit certificate is for people who are _______.
Both low-income and buying their first home. The mortgage credit certificate is intended to help low-income people buy their first home.
5.
Property taxes on your home are tax deductible if _______.
You itemize your deductions. You must itemize your deductions, as opposed to taking the standard deduction.