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Anna71 [15]
3 years ago
9

Jessica purchased a home on January 1, 2018 for $580,000 by making a down payment of $230,000 and financing the remaining $350,0

00 with a 30-year loan, secured by the residence, at 6 percent. During 2018 and 2019, Jessica made interest-only payments on this loan of $21,000 (each year). On July 1, 2018, when her home was worth $580,000 Jessica borrowed an additional $145,000 secured by the home at an interest rate of 8 percent. During 2018, she made interest-only payments on the second loan in the amount of $5,800. During 2019, she made interest only on the second loan in the amount of $11,600. What is the maximum amount of the $32,600 interest expense Jessica paid during 2019 may she deduct as an itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard
Business
1 answer:
Ann [662]3 years ago
5 0

Answer:

$32,600

Explanation:

Calculation to determine her itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard

Using this formula

Itemized deduction =(Financing amount * 6 percent)+(Additional amount borrowed*interest rate of 8 percent)

Let plug in the formula

Itemized deduction=( $350,000 * 6 percent)+($145,000 *8 percent)

Itemized deduction=($21,000+$11,600)

Itemized deduction=$32,600

Therefore her itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard wi be $32,600

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Answer:

Check the following consideration

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Since the business owner follows cash basis of accounting the treatment is amount expensed during the financial year can be shown as expenses. hence in the current case rent for 18months can be shown as expenses for that financial year and it can be shown as a deduction while computing tax liability.

7 0
3 years ago
Explain how and why governments may want to regulate the price setting of a natural monopoly.
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The government wants to protect the consumer's interest, that is why they are regulating the monopoly. Monopolies have the power to set higher prices than the competitive market. They regulate monopolies to prevent excess prices, quality of service( to ensure the firm receives minimum standard of service), monopoly power,promote competition, and natural monopolies( we cannot encourage competition, and it is essential to regulate firm to prevent monopoly of power). <span />
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4 years ago
The firm has just declared a dividend of $1.09 per share for the current fiscal year. The firm has earnings per share of $2.11,
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4 0
4 years ago
Name a form of ownership that is represented by South African broadcasting corporation (SABC) and outline four characteristics o
TEA [102]

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State ownership

Explanation:

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The characteristics of a state ownership are;

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3) The profits from the business are entered into the treasury of the state and are used to carry out public welfare projects

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3 years ago
An industry is composed of 10 firms, all with equal sales (e.g. firm 1 sales are 10% of the market, firm 2 sales are 10% of the
Gelneren [198K]

Answer:

0.40

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I hope my answer helps you

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