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Drew and Joanne are going to buy a new car for $35,000. They are also...

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Accounting

Drew and Joanne are going to buy a new car for $35,000. They are also going to buy a new home for $250,000. They obtain a mortgage of $215,000. They pay 2 points to the bank at the time they take out the mortgage. During the year they also pay $1,500 of interest expense to the bank on the mortgage. They borrow $35,000 from their broker. They put up the securities in their brokerage account as collateral. They use the $35,000 to purchase the car and they pay their broker $1,200 of interest expense during the year. How much interest expense can they deduct on their tax return for the year?

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