When cash is not king
There are lot of real estate buyers out there putting cash ahead of leverage. Good for the seller, not always good for the buyer. Here is a little known tax fact that will bring an unwelcome surprise when those same cash buyers refinance to pull their cash out, and look forward to their mortgage interest deduction (which will be limited by a number of factors); THEY WILL NOT BE ABLE TO TAKE IT!
Here is how mortgage interest works:
You can deduct interest related to acquisition indebtedness up to $1 million dollars when the debt is secured by the principal residence. The debt must be your obligation. New debt you incur to refinance the acquisition indebtedness also qualifies as a deduction but only up to the amount of the refinanced debt.
If you purchase a home with cash, you do not acquire any acquisition indebtedness. Therefore, should you decide to put a loan on the property, it would not be deductible –since the home was originally bought with cash. If there is no original acquisition indebtedness, you will not receive the deduction you are hoping for.
To learn more, contact:
CELL: (775)338-6915
OFFICE: (775)338-6915
http://nvmortgageman.com
nvmortgageman@gmail.com
I have spent the past 20 years involved with real estate and finance.This after a successful career in marketing high technology, from writing guides for IBM to launching and growing a distribution channel for a Fortune 500 company.
Even in these trouble times for the banking industry, I truly enjoy what I do: work with people to develop sound real estate financial strategies, whether 1st time buyer, seasoned real estate investor or custom home builder.My best customer is one that gets involved and wants to make the best decision based on situation an requirement.
I am also very involved civicly.VP of Membership for the Nevada Center for Entrepreneurship & Technology (www.NCET.org) having been on the Northwest Neighborhood Advisory Board, EDAWN Intangible Business Advisory Committee,Reno/Sparks Association of Realtors Technology Committee,Committee Chair for several events for Rotary, Founder of the Somersett Small Business Alliance, former President-Elect of the Nevada Association Mortgage Professionals, just to name a few.
Bottom-line, I take what I do seriously, make sure family comes first and do the right thing.Life is good!
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