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Exam CRCM topic 1 question 303 discussion

Actual exam question from ABA's CRCM
Question #: 303
Topic #: 1
[All CRCM Questions]

Which of the following loans is clearly NOT subject to the IRS mortgage interest reporting requirement?

  • A. A loan made to purchase securities, secured by rural acreage
  • B. A loan made to finance a college education, secured by a piece of commercial real estate
  • C. A loan made to purchase a lot on a lake, secured by a certificate of deposit
  • D. A loan made to purchase a residence, secured by the dwelling
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Suggested Answer: C 🗳️

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Cam22
3 months, 4 weeks ago
Selected Answer: C
Option C, however, involves a loan secured by a certificate of deposit, which is not real property. Since the IRS mortgage interest reporting requirements apply to loans secured by real property, a loan secured by a financial instrument like a certificate of deposit would not be subject to these mortgage interest reporting requirements. This makes option C clearly not subject to the IRS mortgage interest reporting requirement.
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