Buying Home With Cash Has Tax Implications
REM #F718
By Ilyce R. Glink
Summary: A reader comments on a previous question about buying a home with cash. Often a HELOC can be tax deductible where as the cash deal has tax implications down the road.
Q: I have a comment on a question you answered from a young reader who used
her inheritance to purchase a condo for cash. She wanted to rent out the condo
and purchase a town home.
Your column usually has great advice, but your answer to this question though, fell a little short of your normally high standards.
You advised the reader to take out a regular mortgage rather than a home equity line of credit (HELOC) was great. But I believe you misrepresented the tax break she would receive from the mortgage rather than the HELOC.
She would be able to write off the interest no matter which financing option she chooses. You might also have reminded your readers in general that paying cash for a property can have long term tax implications. Only $100,000 of a refinance mortgage on a property bought for cash is tax deductible.
A: Thanks for adding to the discussion.
See the original question at Using
Inheritance For Start In Real Estate.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
Seller Closing Costs
Home Moving Tips: Things to Do Before You Move
Looking At A Seller's Closing Costs
Condo Board Disallows Rentals
How To Find A Management Company For A Condo
Link to This Article
Like what you've read? Spread the word! You can link to this article
from your website by copying the following code and adding it to
a page on your website:
Copyright ©2001-2007. ThinkGlink, Inc.
All rights reserved. Reproduction of material from any www.ThinkGlink.com pages without permission is strictly prohibited.
Site designed by Walker Sands Communications
