Joseph and Sandra, marriedtaxpayers, took out a mortgage on their home for $350,
ID: 2445142 • Letter: J
Question
Joseph and Sandra, marriedtaxpayers, took out a mortgage on their home for $350,000 in1989. In May of 2005, when the home had a fair market valueof $450,000 and they owed $250,000 on the mortgage, they took out ahome equity loan for $220,000. They used the funds topurchase a single engine airplane to be used for recreationaltravel purposes. What is the maximum amount of debt on whichthey can deduct home equity interest?
$50,000.
$100,000.
$220,000.
$230,000.
$3,000.
$3,400.
$4,000.
$5,000.
None of the above.
$50,000.