Which of the Following Statements Regarding the Home Mortgage Interest

Multiple Choice

Which of the following statements regarding the home mortgage interest expense deduction is correct?

A) Taxpayers may deduct interest expense on a limited amount of home equity indebtedness, but they may deduct interest expense on an unlimited amount of home acquisition indebtedness.
B) Taxpayers may deduct interest expense on a limited amount of acquisition indebtedness but an unlimited amount of home equity indebtedness.
C) What a bank might call a "home equity loan" the tax laws will call acquisition indebtedness if the loan is secured by the home and the taxpayer uses the loan proceeds to substantially improve the home.
D) None of the choices are correct.