tax

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Can someone please check my answer for the following problem.

The Smiths wish to refinance their home worth $250,000. They originally paid $130,000 for the home and made $25,000 in improvements. The bank is willing to let the Smith refinance $200,000 with no further improvements to be made to the property. On how much of the loan can the Smiths deduct the interest?

My answer: Can deduct the full interest expense.

Yes.

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