Hello, I am Own2Feet, age 52, still slaving away full time, dreaming of taking off the workaday mask and going back to Who I Really Am by 56, Good Lord willing and the Bail-out doesn't ruin my plans.
I've been lurking on these forums for 2 weeks, enjoying the discussions and seeing some thoughtful advice being dispensed. Sure could use some of that in a particular situation we have:
So...(cue loud splash as I jump in, feet first):
Question: In 2008 we borrowed $100,000 for 10 years at 4.99% (no points/fees) to buy an investment property. Our tax advisor said our interest on this loan, if used for an investment (real estate or any other kind) would be fully deductible, even if we should be unluckily subject to AMT.
For various reasons, we backed out of buying the property. Now we are stuck with loan payments of $1060 per month. There is a prepayment penalty if we hold the loan less than 2 years. We still want to invest the $100,000. Our tax situation, based on 2007’s return:
I would greatly appreciate the benefit of others’ opinions on how they might invest the $100K if they were in our position. I recognize that knowing our present assets and allocations would be helpful, but I’m a little shy, yet, of sharing all that on a public message board. Hope you all are understanding.
Thanks very much for any advice and ideas.
I've been lurking on these forums for 2 weeks, enjoying the discussions and seeing some thoughtful advice being dispensed. Sure could use some of that in a particular situation we have:
So...(cue loud splash as I jump in, feet first):
Question: In 2008 we borrowed $100,000 for 10 years at 4.99% (no points/fees) to buy an investment property. Our tax advisor said our interest on this loan, if used for an investment (real estate or any other kind) would be fully deductible, even if we should be unluckily subject to AMT.
For various reasons, we backed out of buying the property. Now we are stuck with loan payments of $1060 per month. There is a prepayment penalty if we hold the loan less than 2 years. We still want to invest the $100,000. Our tax situation, based on 2007’s return:
- 31% marginal tax bracket,
- 22%% effective tax bracket
- pay 8 % in state and local income taxes
- property taxes 3% of our gross income.
- 6% state sales tax.
I would greatly appreciate the benefit of others’ opinions on how they might invest the $100K if they were in our position. I recognize that knowing our present assets and allocations would be helpful, but I’m a little shy, yet, of sharing all that on a public message board. Hope you all are understanding.
Thanks very much for any advice and ideas.