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eorge recently received a great stock tip from his friend, Mason. George didnt have any...

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Accounting

eorge recently received a great stock tip from his friend, Mason. George didnt have any cash on hand to invest, so he decided to take out a $37,000 loan to facilitate the stock acquisition. The loan terms are 8 percent interest with interest-only payments due each year for five years. At the end of the five-year period the entire loan principal is due. When George closed on the loan on April 1, 2018, he decided to invest $22,200 in stock and to use the remaining $14,800 to purchase a four-wheel recreation vehicle. George is unsure how he will treat the interest paid on the $37,000 loan. In 2018, George paid $2,220 interest expense on the loan. (Hint: Visit www.irs.gov and consider IRS Publication 550.) What amount may he deduct as interest in 2018?

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