Basics Intermediate: What Tax Relief Can You Get for Your Home?

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
The mortgage interest credit is available only to certain homebuyers.
Choose wisely. There is only one correct answer.
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.
Choose wisely. There is only one correct answer.
True. You cannot deduct taxes held in escrow until the taxes are paid.
3.
Which of the following is true regarding home improvement loan interest?
Choose wisely. There is only one correct answer.
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.
Which of the following is most true about home office deductions?
Choose wisely. There is only one correct answer.
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.
5.
What is the maximum you can deduct for all your interest payments on mortgage debt secured by a first or second home?
Choose wisely. There is only one correct answer.
$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.