The Mordens purchased a new car by borrowing $40,000 against their home. At the time of the car loan, the fair market value of their home was $600,000. There was no other debt on the home. The interest on the loan qualifies in 2020 as:
A. Deductible qualified residence interest.
B. Investment interest expense.
C. Nondeductible interest.
D. Deductible personal interest.
Answer:C
The Mordens purchased a new car by borrowing $40,000 against their home. At the time of the car loan, the fair market value of their home was $600,000. There was no other debt on the home. The interest on the loan qualifies in 2020 as:
A. Deductible qualified residence interest. B. Investment interest expense. C. Nondeductible interest. D. Deductible personal interest.