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1.
Which part of a home mortgage is tax-deductible for those who qualify for the deduction?
Interest. Only the interest is deductible.
2.
The mortgage interest credit is available only to certain homebuyers.
True. It is available to low-income homebuyers who are buying their first home.
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.
Taxes held in an escrow account for property tax are only deductible if the money is actually used to pay your property taxes.
True. You cannot deduct taxes held in escrow until the taxes are paid.
5.
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.