The facts for your 2nd Tax Research Assignment are as follows:

In 2013, Mr. Edwards purchased a principal residence for $1,500,000. He made a down payment of $300,000 and financed the remainder by borrowing $1,200,000 through a home equity loan secured by the residence. In 2013, Mr. Edwards paid interest that accrued on the indebtedness during that year. He had no other debt secured by the residence. May he deduct the entire amount of interest which was paid on the home equity loan in 2013?

Instructions:

Please research the tax law and write Mr. Edwards a brief memo of no more than two pages, in which you communicate the results of your research. Use the format for communicating research findings discussed in chapter 15 of your textbook, and use as an example the sample memo found on p. A-6 of Appendix A. Identify relevant statutory, administrative, and judicial authorities and discuss how these authorities affect your conclusion concerning the deductibility of the interest paid on the home equity loan.

*Remember: while IRS publications are useful as secondary sources, they are not primary sources that can be cited and relied upon in a tax research memorandum.

Your research assignment will be graded using the following criteria:

1. Recognition of the important facts and issues

2. Correct conclusion

3. Clarity of writing

4. Proper use of relevant sources to support your conclusion and analysis.

5. Proper citation of relevant sources

6. Proper format, spelling & grammar

*Please submit your memo as a Word or PDF document into your Tax Research Assignment 2 folder. Please put your last name somewhere in the file name. This assignment is due to me by Sunday, April 12 at 11:59 pm EST.