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A) Pay the mortgage company $10,000 in interest but save $3,960 in taxes
or
B) Pay the mortgage company $0.00 and pay an additional $3,960 in taxes
Special Hint: Option A costs you $10,000. Option B costs you $3,960.
Does not make real world sense since non-payment on a mortgage will incur more debt with the mortgage company and will put one into default and why would it then require to pay more in taxes then.
Does not make real world sense since non-payment on a mortgage will incur more debt with the mortgage company and will put one into default and why would it then require to pay more in taxes then.
A) Pay the mortgage company $10,000 in interest but save $3,960 in taxes
or
B) Pay off your mortgage and pay an additional $3,960 in taxes every year.
Special Hint: Option A costs you $10,000. Option B costs you $3,960.
One can't give a good answer to your question - not enough info. If A means you have a mortgage and you have a property that's gaining equity at a good clip, then it's worth every penny at twice the price.
A) Pay the mortgage company $10,000 in interest but save $3,960 in taxes
or
B) Pay off your mortgage and pay an additional $3,960 in taxes every year.
Special Hint: Option A costs you $10,000. Option B costs you $3,960.
It depends on the interest rates. If your money can be reinvested at 0.5 percent but the mortgage costs 5 percent? In the last couple of years there have been situations, where the mortgage rate on old loans was lower than the reinvestment rates. In the latter case you would keep the loan and buy a bond.
You will pay more taxes from the new income and have less deduction overall.
What is important is that the maturities of the borrowings and investments are the same at hat the quality of the investment is such that the money is still there when you need it.
I failed big time with this one.
Let's say you have more than $300,000 in the bank. Your mortgage is $300,000. Should you pay it off or keep the mortgage in order to get the tax deduction?
A) Pay the mortgage company $10,000 in interest but save $3,960 in taxes
or
B) Pay off your mortgage and pay an additional $3,960 in taxes every year.
Special Hint: Option A costs you $10,000. Option B costs you $3,960.
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