t/p has the interest only loan for the next 5 years. Is this amount deductible each year as he pays it. Thank you.
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Pookie -
Are you asking about a business, or home mortgage or something else?
Normally all interest for a qualified is deductible, doesn't matter if you also pay principle. -
interest only loan
Perhaps this is not as complicated as it sounds but this is a mortgage on a home and he made the comment that "it's a child support issue" and laughed. He said he has this loan for 5 years. So I suppose if it meets all the criteria he can deduct it. ThanksComment
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>>not as complicated as it sounds<<
Strange comment to include in the same sentence as "child support." Here's a wild guess: He is hiding equity by showing a lien.
Well, that's not your problem. Make sure it meets the requirements, including $100,000 limit for non-purchase debt, secured by the property, and reporting name and SSN if it isn't on a 1098.Comment
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hmm
Very odd statement to make. What did he mean by it being a child support issue?Comment
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He is probably making the house mortgage payment for property now owned by the x-spouse and not really deductible by him. He gets a 1098 because they may have never notified to take him off the mortgage papers.Originally posted by RobertsComment
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Called astute tax planning if you can get away with it. Mortgage interest payments are deductable and child support payments are not. At the end of the five year term he can probably restructure it if he wishes.Comment
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problem
Child support payments are court appointed and I've never seen a court that would allow someone to substitute actual cash for a mortgage payment. You could do that with alimony but not likely with child support.
His problem is that the ex-wife could come back in a few years and tell the court he never paid her and if he doesn't have proof he actually paid her cash funds, he'll be required the pay the entire amount AGAIN. Just because they have a verbal agreement doesn't mean anything if she takes him to court.
This all assumes the conclusions we have jumped to are reality.Comment
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