Quote:
Originally posted by Brian993
House as a deduction? And what give the interest to a bank for what, thin air?
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OK, I'm turning @sshole mode off for a minute BBP.
Do you have a note on your current primary residence, BBP? If so, you are allowed to deduct the interest you are paying on that note in your itemized deductions. This is what the other guys are talking about. Yes, given current interest rates, it is silly not to refinance (or acquire new property as you mention). As an aside, I hope you or your tax preparer have been taking this deduction-if not you need to look into some amendments on prior returns!! I'm not sure of the rules on this but you may be looking at cubic $$$ refund adjustment...
In essence, you are buying yourself your cake and floating the ability to eat it too at a low rate. Or, the interest you pay on the new residence allows you to keep your 993. Consider this:
-Go look at the 15-year rates available, plug in some numbers with the 65k on an internet P&I calculator.
-Note that this interest rate is effectively even lower since the IRS is going to let you deduct the interest expense each year.
-Realize you'll be free and clear in 15 years and will have been able to keep the 993.
-Weigh this
extremely low relative cost of accomplishing your goals against the end result. Debt doesn't have to be a bad thing when managed properly.
-dtw