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Financial Planning / Tax Strategies


Subject:  Re: Home Loan With Stock for Collateral Date:  7/25/1999  8:34 PM
Author:  hghcpa Number:  17653 of 128042

I would suggest you be very careful here.

The type of interest you are paying is critical as to where on the return and how much can be deducted.

Mortgage interest must be secured by the principal residence in order to qualify. In order for it to be "secured" usually means a deed of trust at the local courthouse.

Investment interest is limited to the amount of investment income - so if you are paying 5k in interest and only have 2k in investment income - you see the limitatiions here i'm sure.

There are also some crazy "tracing" rules in the Code that could enter into this scenario.

IOW - funds borrowed on margin and used to finance a trip to Belize -- probably not deductible.

Gets real complex.

Be careful.


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