Mr. Q is a U.S. Government Employee assigned to support the US Army in Korea. In 2009, Mr. Q earned $80,000 and received a $35,000 tax-free housing allowance. Mr. Q is single and has no children.
On January 1, 2009, Mr. Q bought a traditional Korean home just outside of Seoul, which he uses as his primary residence. (All relevant figures have been converted to Dollars.)
The property cost $500,000.
Mr. Q’s expenses associated with the home in 2009 were:
Mortgage principal: $4,000
Mortgage interest: $30,000
Real estate taxes: $0 (would have been $9,000, but Mr. Q is exempt under relevant SOFA statutes)
Utility costs: $2,500
Mr. Q plans to file a Schedule A with his tax return and deduct the $39,000 in mortgage interest and taxes.
How would you advise Mr. Q on the question of the filing of his schedule A?