Ike and Tina were married in 2001 and shortly thereafter purchased a home for $1
ID: 2452067 • Letter: I
Question
Ike and Tina were married in 2001 and shortly thereafter purchased a home for $1,000,000, taking out a $750,000 mortgage. They did not have any children. In 2015, Ike and Tina divorced. The divorce decree gave sole possession and ownership of the house to Ike. Tina moved out and purchased another residence. However, Tina was required to continue making the mortgage payments and pay the property taxes as part of her obligation for spousal support. The amount of mortgage interest paid in 2015 was $30,000 and the property tax she paid was $10,000. The amounts paid each year will be similar in the foreseeable future. Tina is uncertain about the tax implications of these payments for 2015 and future years.
Home purchase amount 1,000,000
Mortgage 750,000
Less: Tax deduction 30,000
Less: Interest amount 10,000
Remaining amount 710,000
Tax deduction: $750,000 * 4% = $30,000
Q: Where is 4% come from
Explanation / Answer
Answer: 4% is the mortgage interest rate.
($30000/$750000)*100=4%