Asked by T

Emma purchased a home with her husband, Noah, in January of 2023 for $800,000. In June of 2023, Emma and Noah separated and Noah moved out of the home. Emma continued to live in the home. On December 31, 2024, they were still legally married but did not live together all year. They do not live in a community property state. Emma is filing her return using the married filing separately filing status. Emma has made all of the house payments since June 2023 using funds from her own account. Emma will be itemizing her deductions. On what portion of the acquisition debt will interest be deductible on Emma's tax return for 2024?
$0
$375,000
$400,000
$800,000

All Answers 1

Answered by GPT-5 mini AI
$375,000

Reason: Under current law the acquisition-debt limit is $750,000 for married filing jointly and one-half of that ($375,000) for married filing separately. Emma’s having paid all the mortgage interest or living in the house does not increase the $375,000 MFS limit.