Old they may deduct interest on 20000 acquisition

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Unformatted text preview: 00 to pay off the old mortgage and $260,000 cash out). old They may deduct interest on: $20,000 acquisition debt (carried over from the old $20,000 mortgage), and mortgage), $100,000 of home equity debt. $100,000 29 “Points” as Interest x Interest paid at the time of obtaining a loan is Interest called “points.” Essentially, points are prepaid interest. prepaid 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 the x Refinancing “points” are amortized over the Refinancing life of the loan life 30 Charitable Contributions BASIC QUESTIONS Three questions must be answered before taking a charitable contribution deduction: taking ‚ Was the contribution made to a qualifying Was charity? charity? ƒ How is the contribution valued (i.e., at FMV How or adjusted basis)? or „ Is there any limitation on the amount of the Is contribution that can be claimed? contribution 31 Charitable Contributions QUALIFYING ORGANIZATIONS Nonprofit Entities organized for the following purposes Nonprofit can apply to the IRS for “qualifying organization” status can 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 Contributions on Schedule A of Form 1040 (FROM AGI) on 32 Charit...
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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.

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