Which of the following statements related to interest deductibility is correct?
Question 12 options:
If an individual borrows $100,000 to purchase investments and the investments are later sold for $60,000, interest on the $100,000 will continue to be fully deductible provided the $60,000 is used to purchase other investments.
If a business borrows to provide interest free loans to its employees, the interest on the borrowing will not be deductible
Interest paid on a mortgage secured by a principal residence is never deductible.
If an individual borrows in order to buy common shares, the interest on the borrowing will only be deductible if the shares have a long-term history of paying dividends.