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Unformatted text preview: 00 to pay off the
old mortgage and $260,000 cash out).
They may deduct interest on:
$20,000 acquisition debt (carried over from the old
$100,000 of home equity debt.
29 “Points” as Interest
x Interest paid at the time of obtaining a loan is
Interest called “points.” Essentially, points are
One Point = 1% of the mortgage amount
x Points paid by the buyer or seller of a primary
Points residence are deductible if incurred to obtain
the initial mortgage or to improve the home
x Refinancing “points” are amortized over the
Refinancing life of the loan
30 Charitable Contributions
Three questions must be answered before
taking a charitable contribution deduction:
Was the contribution made to a qualifying
How is the contribution valued (i.e., at FMV
How or adjusted basis)?
Is there any limitation on the amount of the
Is contribution that can be claimed?
31 Charitable Contributions
Nonprofit Entities organized for the following purposes
can apply to the IRS for “qualifying organization” status
x Religious x Educational x Charitable x National amateur sports
x Prevention of cruelty to
Prevention x Scientific
x Literary children & animals
children Contributions to qualifying organizations are deductible
on Schedule A of Form 1040 (FROM AGI)
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This note was uploaded on 06/06/2011 for the course ACE 346 taught by Professor Peter during the Spring '11 term at University of Illinois, Urbana Champaign.
- Spring '11