Question

which tax implication is common for homeowners with a mortgage?
mortgage insurance is reimbursed at the end of the loan term.
mortgage interest paid is tax-deductible.
property taxes are waived for the first year.
homeowners are exempt from paying capital gains tax upon selling their home.

Explanation:

To determine the correct tax implication for homeowners with a mortgage, we analyze each option:

• The first option about mortgage insurance reimbursement at the end of the loan term is incorrect as mortgage insurance (like PMI) doesn't work this way and isn't related to a common tax implication.
• The second option: Mortgage interest paid on a primary (and sometimes secondary) residence is tax - deductible, which is a well - known and common tax benefit for homeowners with a mortgage.
• The third option is incorrect because property taxes are not waived for the first year of homeownership; homeowners are generally responsible for paying property taxes each year.
• The fourth option: While there are capital gains tax exemptions for home sales, the exemption has specific criteria (like ownership and use requirements) and is not simply an exemption for all homeowners upon selling, so this is not a common or accurate general tax implication related to having a mortgage.

Answer:

B. Mortgage interest paid is tax - deductible.