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| Subject: complicate vacation home transaction | Date: 2/5/2004 11:51 PM | |
| Author: HokeySon | Number: 69261 of 118626 | |
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Hello, I posted the below on the buying a home forum and thought it might be beterr over here? Also after posting, I think I should add that the question is not whether to buy the home, it is whether to pay cash or set up the deal as outlined. any comments appreciated. I am considering buying a vacation home using the folowing and am interested in any thoughts as to what I may have missed or comments on its advisability (numbers changed for ease of analysis): background facts: Price 100 k liquid money to purchase 100k no traditional mortage available (75 rural acres, with manufacured home) Plan: set up NV corp. purchase 100 shares of corp at 1000 each. NV corp makes loan to me securing purchas of home n amount of 100k I pay 10% interest on loan to corp. Results(?): I can deduct 10k in interest from my personal taxes (assume 40% Tax made up of 31% fed and 8% state) = tax savings of 4000 corp gets 10k in income (assume 15% fed tax no state tax and no deductions -- trying to be conservative here) = taxes of 1500 net tax savings = 2500 8500 of my money now sitting in corp for its investment (but subject to some flavor of taxation at pay out from corp). Alternative: pay cash 10,000 taxed at 40% leaves 6,00 for investment each year. Any thoughts? thanks. trying to get a handle on this to decidee what to do. |
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