Anna and Bob bought their home for $250,000 in 2001. Since moving in they have completed the following: Pool $25,000 Security System $ 6,000 Landscape $ 4,000 Drapes $15,000 Their 2001 loan was at 10% and interest rates are now at 7%. Their home is now

worth $400,000. Their lender will refinance $320,000 (80% of market value). How much can Anna and Bob refinance and still deduct all interest on their income tax?


$250,000
25,000

6,000

4,000

15,000

$300,000 - original cost plus improvements

Business

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