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Edward bought a house on January 1 of year 1 for $600,000. He made a...

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Accounting

Edward bought a house on January 1 of year 1 for $600,000. He made a $100,000 down payment and obtained a $500,000 30-year mortgage loan for $500,000 at 6% interest. In year 1, Patrick paid interest-only on the loan of $30,000. July 1 of year 1, Edward borrowed 75,000 on a home equity loan at 8% interest. In year 1, he made interest-only payments of $3,000 on the home equity loan. How much of the $33,000 in interest payments may Edward deduct in year 1, assuming he used the 75,000 to purchase a Chevrolet Corvette?

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