Top Posters
Since Sunday
82
a
50
14
10
G
9
I
8
m
8
7
m
7
K
7
6
b
6
New Topic  
Augustus1 Augustus1
wrote...
Posts: 1894
Rep: 1 0
2 years ago
On August 1 of the current year, Terry refinances her home and borrows $240,000. Terry is required to pay two points on the loan. The loan is secured by the residence and the charging of points is an established business practice in the area. The term of the loan is 20 years, beginning on August 1 of the current year. How much, if any, of the points may Terry deduct in the current year?
A) $0
B) $100
C) $240
D) $4,800
Textbook 

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
Authors:
Read 281 times
3 Replies
We do not judge the people we love.

Prentice Hall's Federal Taxation by Kramer
Replies
Answer verified by a subject expert
Yoko900Yoko900
wrote...
Top Poster
Posts: 1876
2 years ago
Sign in or Sign up in seconds to unlock everything.
B
Here's why: $240,000 × 2% = $4,800 points paid. 20 years × 12 months per year = 240 months in the loan. $4,800 ÷ 240 = $20.00 per month amortization. Five months this year: $20 × 5 = $100.
1

Related Topics

wrote...
2 years ago
Your explanation helped, amazing amazing!
We do not judge the people we love.

Prentice Hall's Federal Taxation by Kramer
wrote...
A week ago
thank you
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers.
Learn More
Improve Grades
Help Others
Save Time
Accessible 24/7
  70 People Browsing
Your Opinion
Which of the following is the best resource to supplement your studies:
Votes: 59

Related Images
 787
 2929
 61