The Motley Fool Discussion Boards
Personal Finances / Buying or Selling a Home
|Subject: Re: Downpayment Sources||Date: 5/11/2013 10:48 AM|
|Author: JAFO31||Number: 125254 of 127912|
<<<"Interest" is defined under the Finance Code as "compensation for the use, forbearance, or detention of money" .... please explain again how it does not apply in the context of a 401-k loan.>>>
"Sure. Easy. You don't pay interest to yourself. You don't pay compensation to yourself."
So all those people who own simgle member LLCs or any other disregarded entity and pay themselves a salary reaaly do not have earned income? You ever try your arguemtn with the IRS.
"It's a logical impossibility. The entity (you) that is receiving the "interest" is the same entity as is paying the "interest"."
The IRS begs to differ (at least with respect to 401-k plans), otherwise, there would be no need to plan adminstrators and trustees with fiduciary duties.
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|