Jackson owns two residences. The second residence, which has never been used for rental purposes, is the only residence that is subject to a mortgage. The following expenses were incurred for the second residence during the current year:
- Mortgage interest : $5,000
- Utilities: $1,200
- Insurance: $6,000
For regular income tax purposes, what is the maximum amount allowable as a deduction for Jackson's second residence for the current year?
a. $6,200 in determining adjusted gross income.
b. $11,000 in determining adjusted gross income.
c. $5,000 as an itemized deduction.
d. $12,200 as an itemized deduction.
Answer: C
CPA Exam
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