If Todd's mother had been his dependent, what would be the effect on their loan interest situation?

If Todd's mother was a dependent, this would have implications for how interest deductions work on a loan, specifically in relation to tax regulations surrounding dependents. When an individual claims another as a dependent, certain deductions and credits can change. In this scenario, because Todd's mother is his dependent, it would generally prevent them from fully utilizing the interest deduction in the same way as individuals who are not dependents.

The IRS typically allows for certain deductions, but if an individual claims someone as a dependent, it can alter the eligibility for certain deductions, including those related to loan interest. For instance, if they are in a situation where the mortgage interest is being considered, having a dependent might limit them, leading to the conclusion that they would be unable to deduct any interest. This aligns with tax regulations that restrict deductions based on the relationship between the taxpayer and the claimed dependent.

In summary, if Todd's mother had been his dependent, Todd would not be able to deduct any interest paid, which makes the choice regarding their inability to deduct any interest correct.