Question

For mortgages obtained in 2020, homeowners may deduct interest on up to $(1) of acquisition indebtedness. Fill in the blank to complete the statement:

a) $1 million
b) $500,000
c) $750,000
d) $250,000

Answer 1

Homeowners may deduct interest on up to $750,000 of acquisition indebtedness for mortgages obtained in 2020.

Step-by-step explanation:

For mortgages obtained in 2020, homeowners may deduct interest on up to $750,000 of acquisition indebtedness. The correct option to fill in the blank is c) $750,000. This limit on mortgage interest deduction is part of the Tax Cuts and Jobs Act of 2017, which reduced the previous limit of $1 million to $750,000 for mortgage debt incurred after December 15, 2017. It's important to note that the limit applies to the total amount borrowed for acquiring, constructing, or substantially improving a taxpayer's primary or second home.