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1.
The mortgage interest credit is available only to certain homebuyers.
True. It is available to low-income homebuyers who are buying their first home.
2.
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.
3.
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.
4.
Points charged by mortgage lenders are _______.
To compensate the lender for various administrative fees. These fees can easily be as high as several thousand dollars.
5.
Which of the following are not qualifying capital improvements for your home?
Repairs to your roof, plastering, and fixing broken windows. These improvements do not add anything new to the home.