Ted, who is single, owns a personal residence in the city.He also owns a condo near the ocean.He uses the condo as a vacation home.In March, he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During the year, he paid the following amounts of interest. $$\begin{array} { l r }
\text { On his personal residence } & \$ 15,500 \
\text { On his condo } & 6,200 \
\text { On the home equity loan } & 4,800 \
\text { On credit card obligations } & 1,700
\end{array}$$ What amount, if any, must Ted recognize as an AMT adjustment in 2019?
A)$0
B)$4,800
C)$6,200
D)$11,000

Question

Ted, who is single, owns a personal residence in the city.He also owns a condo near the ocean.He uses the condo as a vacation home.In March, he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During the year, he paid the following amounts of interest. $$\begin{array} { l r } 
\text { On his personal residence } & \$ 15,500 \
\text { On his condo } & 6,200 \
\text { On the home equity loan } & 4,800 \
\text { On credit card obligations } & 1,700
\end{array}$$ What amount, if any, must Ted recognize as an AMT adjustment in 2019?
A)$0
B)$4,800
C)$6,200
D)$11,000

Quizplus · Accepted Answer

Interest on the home equity loan used to purchase a luxury automobile is not deductible for AMT purposes, but since the Tax Cuts and Jobs Act of 2017, it's also not deductible for regular tax purposes if not used to buy, build, or substantially improve the taxpayer's home. Therefore, there's no difference between the regular tax and AMT calculations for this interest, resulting in no AMT adjustment.

Ted, Who Is Single, Owns a Personal Residence in the City.He