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

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Senior Manager
Joined: 22 Jun 2005
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Under the 1986 tax law, interest payments on a refinanced [#permalink]

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28 Aug 2005, 03:01
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Question Stats:

0% (00:00) correct 100% (00:43) wrong based on 7 sessions

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Under the 1986 tax law, interest payments on a
refinanced home loan are deductible only if the
amount of the loan does not exceed the purchase
price of the home, the cost of improvements, and any
additional amount borrowed against the home to pay
for medical or educational expenses.

(A) any additional amount borrowed against the
home to pay for medical or educational expenses

(B) borrowing any additional amount against the
home for payment of medical or educational
expenses

(C) also borrowing any additional amount against the
home to pay for medical or educational expenses

(D) any additional payment of medical or educational
expenses that were borrowed against the home

(E) any additional payment borrowed against the
home for medical or educational expenses

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Manager
Joined: 07 Jun 2005
Posts: 90

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28 Aug 2005, 04:34
not too sure about this one, but think I'll go with D. mainly because I think "borrowed against the home" should come after "additional payment of...expenses"

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GMAT Club Legend
Joined: 07 Jul 2004
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Location: Singapore

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28 Aug 2005, 05:44
B is out. 'borrowing' is not parallel
C is out. use of 'also' is redundant

Between A, D and E, I'll pick D. 'of medical or educational expenses' I feel, should come before 'borrowed against the home'.

I'll go with D

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SVP
Joined: 05 Apr 2005
Posts: 1708

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28 Aug 2005, 07:44
A, only parallel structrure. it is alos in direct and active. D is in passive.

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Director
Joined: 11 Mar 2005
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28 Aug 2005, 08:24
Looks A to me...

borrowed correctly modifies the amount in A..

D is weird. D says that expenses were borrowed, infact it should be the amount.
E is same way too. You can not borrow a payment. it should be the amount.

b and C are out becaue they are not parallel.

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Manager
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28 Aug 2005, 16:01
actually in hind-sight, i change to A.

A is saying, the amount of loan should not exceed the amount borrowed to make payments. and D is saying the amount of loan should not exceed the payments. but the "payments that were borrowed" doesnt seem to make sense. in fact it is the amount that should be borrowed to make payments and not payments that is borrowed, so guess OA shud be A.

does this explanation make sense?

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Senior Manager
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29 Aug 2005, 04:31
OA is A

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Senior Manager
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29 Aug 2005, 04:32
OA is A

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CEO
Joined: 21 Jan 2007
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21 Jun 2007, 14:15
macca wrote:
Under the 1986 tax law, interest payments on a
refinanced home loan are deductible only if the
amount of the loan does not exceed the purchase
price of the home, the cost of improvements, and any
additional amount borrowed against the home to pay
for medical or educational expenses.

(A) any additional amount borrowed against the
home to pay for medical or educational expenses

(B) borrowing any additional amount against the
home for payment of medical or educational
expenses

(C) also borrowing any additional amount against the
home to pay for medical or educational expenses

(D) any additional payment of medical or educational
expenses that were borrowed against the home

(E) any additional payment borrowed against the
home for medical or educational expenses

DE are wrong because we are talking about additional amounts of money, not additional payments. Additonal payments does not make sense. No one borrows payments of money. You make payments to the lender.

C is wrong because it and also is redundant.

B is wrong because it is not parallel. amount....cost....borrowing (noun,noun, verb/gerund)

A is correct. amount....cost....amount... (all nouns)

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Manager
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21 Jun 2007, 15:18
Confused between A and D.
(A) Seems to be correct.

B and C : Borrowing is incorrect.

(D) Seems like "Expenses were borrowed against the home". The amount was borrowed. Expenses were made. But may be I am overcorrecting.

(E) "..home for medical or educational expenses" seems like a home OF medical expenses.

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Manager
Status: Completed GMAT on 22 Nov 2011
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31 May 2011, 01:11
Option (A) - clear issue of parallelism

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Manager
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Concentration: Technology, Entrepreneurship
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31 May 2011, 02:48
A is parallel and correct idiom. So A it is.

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Re: SC:tax law   [#permalink] 31 May 2011, 02:48
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