Home Mortgage Interest
Response to the following problem:
The Hemphills own three homes. Their main home is located in Pittsburg. They also own condos in Las Vegas and Tampa. The amount of acquisition debt and interest paid on each property is shown below.
Location of Home Acquisition Debt Interest Paid
Pittsburg $140,000 $ 8,330
Las Vegas 440,000 21,555
Tampa 400,000 23,443
a. Compute the Hemphills' home mortgage interest deduction.
b. How would your answer to Part a. change if the Pittsburg home were fully paid for, and the Hemphills only had mortgages on the two vacation homes?