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# Under the 1986 tax law, interest payments on a refinanced

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Current Student
Joined: 29 Jan 2005
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Under the 1986 tax law, interest payments on a refinanced [#permalink]

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13 May 2005, 08:35
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Under the 1986 tax law, interest payments on a refinanced business loan are deductible only if the amount of the loan does not exceed the value of the business, the cost of refinancing, and any additional amount borrowed against the business to pay for tax or legal expenses.

(A) any additional amount borrowed against the business to pay for tax or legal expenses
(B) borrowing any additional amount against the business for payment of tax or legal expenses
(C) also borrowing any additional amount against the business to pay for tax or legal expenses
(D) any additional payment of tax or legal expenses that were borrowed against the business
(E) any additional payment borrowed against the business for tax or legal expenses

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Director
Joined: 11 Mar 2005
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13 May 2005, 12:38
B - not concise and moreover making "the borrowing" the subject instead of payment.
C - also is not needed
D - number problem (has to be singular)

Between A and E, it is easy to pick. Since we are talking about the payment and not amount to pay for.

I will pick E

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Intern
Joined: 21 Mar 2005
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13 May 2005, 20:56
Don't you think guys that 'amount borrowed against the business" is better that 'payments borrowed against the business' as payments are not borrowed.

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Director
Joined: 18 Apr 2005
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13 May 2005, 21:23
Imo A is indeed parallel and so is E but 'payment borrowed'??? I'd choose A too.

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Manager
Joined: 07 Apr 2005
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13 May 2005, 22:08
I choose A.

(A) any additional amount borrowed against the business to pay for tax or legal expenses

(E) any additional payment borrowed against the business for tax or legal expenses

The concept of "deducting only if the amount of the loan does not exceed...the additional payment borrowed against the business," seems a bit awkward. But then again, I have seen some pretty strange stuff from the test-prep folks.

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Senior Manager
Joined: 10 Nov 2004
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13 May 2005, 23:07
Can someone refute D.
I donot find A,D,E much different.

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Current Student
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14 May 2005, 19:43
OA is A.

No OE yet...

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Director
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15 May 2005, 03:42
Isn't A wordy becos of "any additional amount borrowed against the business to pay for tax or legal expenses"

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15 May 2005, 03:42
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# Under the 1986 tax law, interest payments on a refinanced

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