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Under the 1986 tax law, interest payments on a refinanced

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

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New post 21 Mar 2009, 11:25
2
11
00:00
A
B
C
D
E

Difficulty:

  55% (hard)

Question Stats:

62% (01:03) correct 38% (01:08) wrong based on 768 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

https://www.nytimes.com/1987/04/12/realestate/postings-tax-tip-refinanced-mortgages.html

Prior to the new law, interest payments on a refinanced home loan were fully deductible. Under the new law, the interest is 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 a home to pay for medical or educational expenses. The point to the rule is to exclude benefits from those using their homes to finance other kinds of consumer spending. The Aug. 16 cut-off arose from the fact that the House-Senate conference committee reached agreement on the legislation on that date.

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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 21 Mar 2009, 11:43
9
IMO A.

nitya34 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
- Good
(B) borrowing any additional amount against the
home for payment of medical or educational
expenses
-- Parallelism requires noun after "and"
(C) also borrowing any additional amount against the
home to pay for medical or educational expenses
-- Parallelism requires noun after "and"
(D) any additional payment of medical or educational
expenses that were borrowed against the home
- expanses never borrowed
(E) any additional payment borrowed against the
home for medical or educational expenses

- payment can't be borrowed
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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 21 Mar 2009, 12:22
1
I found this question good one...
Sentence says that "interest payments on loan are deductible only if the amount of the loan does not exceed the purchase price of the home, the cost of improvements.
If we see the coloured clauses they indicate that we are talking in terms of some amount, i.e the structure would be parallel if we talk in terms of amount in every clause. Thus B and C are out. E says "payment borrowed"...I am sorry as far as I know payments are always made they can never be borrowed.For me it is out for this reason. D wrongly says that expenses were borrowed...hence out..So A is my answer.
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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 21 Mar 2009, 12:57
Hi mates,

IMO A

B out: changes de meaning of the sentence
C out: same as in B
D out: the tense is not correct, it should be present perfect. Also, "payments" cannot be borrowed
E out: "payments" cannot be borrowed

OA and Source?

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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 27 Mar 2009, 10:01
nitya34 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



IMO A).
amount of the loan does not exceed any additional amount borrowed against - amount does not exceed amount (it cannot be payment). logical parallism.
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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 24 Mar 2010, 04:15
[quote="nitya34"]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

Spoiler: :: OA
A
[/quote
listing in B and C are not parallel - X, Y and Z
left with A, D, and E:
E: "payments" were borrowed against home.....WRONG
D: uses a passive tone; also it says "payments" were borrowed...WRONG
A: properly structured; parallel listing: X, Y, and Z (borrowed against the home...) CORRECT
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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 02 Apr 2013, 00:09
Thanks so much for your question. The point I learn is that payment can't be borrowed. Good point for non-native speaker.
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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 16 Jun 2015, 04:19
This is a type of question, in which my already well-developed GMAT sense told me to pick A, because in (D) and (E) you can't borrow a payment. And I saw it. But in the same time in (A), which has a first part which is very good and concise, the second part with the infinitive (to pay) appeared wrong to me - "any additional amount borrowed against the home to pay for medical or educational expenses". Who borrowed something to pay?! I was literally looking for the antecedent of the verb. Can someone explain this to me so that I don't doubt this kind of phrasing in the future.

Thanks!
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Re: Under the 1986 tax law, interest payments on a refinanced  [#permalink]

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New post 09 Sep 2018, 02:36
B,C -> Unparallel Structure.
D,E -> Modifier issue, "additional payment" should be "additional AMOUNT"
Hence, A is the Answer.
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Re: Under the 1986 tax law, interest payments on a refinanced &nbs [#permalink] 09 Sep 2018, 02:36
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