1. On November 1, year 1, Jamie (who is single) purchased and moved into her principal residence. In the early part of year 2, Jamie was laid off from her job. On February 1, year 2, Jamie sold the home at a $68,000 gain. She sold the home because she found a new job in a different state. How much of the gain, if any, may Jamie exclude from her gross income in year 2?
$0
$6,800
$31,250
$68,000
2. In year 1, Kris purchased a new home for $600,000 by making a down payment of $450,000 and financing the remaining $150,000 with a loan, secured by the residence, at 5 percent. As of January 1, year 4, the outstanding balance on the loan was $120,000. On January 1, year 4, when his home was worth $660,000, Kris refinanced the home by taking out a $380,000 mortgage at 5 percent. With the loan proceeds, he paid off the $120,000 balance of the existing mortgage and used the remainder for purposes unrelated to the home. During year 4, he made interest only payments on the new loan of $19,000. What amount of the $19,000 interest expense on the new loan can Kris deduct in year 4 on the new mortgage as home related interest expense?
$4,000
$11,500
$11,000
$19,000
3. Amanda purchased a home for $440,000 in year 1. She paid $88,000 cash and borrowed the remaining $352,000. This is Amanda's only residence. Assume that in year 10 when the home had appreciated to $660,000 and the remaining mortgage was $264,000, interest rates declined and Amanda refinanced her home. She borrowed $440,000 at the time of the refinancing, paid off the first mortgage, and used the remainder for purposes unrelated to the home. What is her total amount of qualifying home-related debt for tax purposes?
$264,000
$308,000
$440,000
$484,000
4. On March 31, year 1, Mary borrowed $250,000 to buy her principal residence. Mary paid 2 points to reduce her interest rate from 5 percent to 4 percent. The loan is for a 30-year period. What is Mary's year 1 deduction for her points paid?
$42
$125
$3,750
$5,000