Choice "C" is correct. For a personal residence that is not used for rental purposes, no deduction is allowed for utilities costs or insurance, thus the only deductible amount here is for the mortgage interest. Note that property taxes (not present in this problem) are deductible. In this problem we are not told whether the interest relates to acquisition indebtedness or home equity indebtedness. The deduction for interest on home equity indebtedness is limited to interest on $100,000 of indebtedness, but this is unlikely to be a problem here even if the interest relates solely to home equity indebtedness. This is because of the amount of interest and the fact that there is no debt associated with Jackson's other residence. The deduction for personal residence interest is an itemized deduction.
Choice "d" is incorrect. The utilities cost is not deductible; furthermore, the deduction for personal residence interest is an itemized deduction.
Choice "b" is incorrect. The insurance cost is not deductible; furthermore, the deduction for personal residence interest is an itemized deduction.
Choice "a" is incorrect. For a personal residence, neither insurance costs nor utilities costs are deductible.