Can I lend myself the money for my mortgage.

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Subject Author Date Can I lend myself the money for my mortgage. steviekm3 10-25-2008  Re: Can I lend myself the money for my mortgage. DF2 10-25-2008  Re: Can I lend myself the money for my mortgage. Mark Bole 10-25-2008  Re: Can I lend myself the money for my mortgage. Dick Adams 10-26-2008  Re: Can I lend myself the money for my mortgage. D. Stussy 10-26-2008  Re: Can I lend myself the money for my mortgage. Seth 10-26-2008  Re: Can I lend myself the money for my mortgage. Gene E. Utterback, EA, RF... 10-27-2008  Re: Can I lend myself the money for my mortgage. Stuart Bronstein 10-27-2008
Posted by steviekm3 on October 25, 2008, 1:42 pm Please log in for more thread options I have a mortgage and also have enough cash to pay off about half of the mortgage. What I want to do is do something where I create a mortgage company and put my cash into it. Then the company pays the bank off half the mortgage and gets interest payments from me. Then I can still deduct the interest of the mortgage payments from my income tax. But the question is how would the company I own calculate profit. I don't want it to show a profit or tax has to be paid by that profit. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by DF2 on October 25, 2008, 5:20 pm Please log in for more thread options In misc.taxes.moderated, steviekm3 wrote: >I have a mortgage and also have enough cash to pay off about half of >the mortgage. > >What I want to do is do something where I create a mortgage company >and put my cash into it. Then the company pays the bank off half the >mortgage and gets interest payments from me. > >Then I can still deduct the interest of the mortgage payments from my >income tax. > >But the question is how would the company I own calculate profit. I >don't want it to show a profit or tax has to be paid by that profit. Don't do it. Even if it were somehow legal, then the company would have to declare those interest payments as taxable income. And if it saves you money, be confident it is not legal. I am not a pro, but I feel confident that the pros will agree. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Mark Bole on October 25, 2008, 7:41 pm Please log in for more thread options steviekm3 wrote: > I have a mortgage and also have enough cash to pay off about half of > the mortgage. > > What I want to do is do something where I create a mortgage company > and put my cash into it. Then the company pays the bank off half the > mortgage and gets interest payments from me. The company didn't loan you any money, so why would you be making interest payments? > But the question is how would the company I own calculate profit. I > don't want it to show a profit or tax has to be paid by that profit. You begin to see why the whole concept is deeply flawed and in any case will not accomplish anything meaningful, or even be recognized as a legitimate economic endeavor. If you tried to evade taxes via such a scheme, you would almost certainly end up facing penalties. Other non-tax related factors to consider: if typical, your mortgage payments will not decrease simply because you pay off extra principal, they'll simply end sooner than otherwise. Also, converting a liquid asset (cash) into an illiquid one (equity in your residence) may not be a wise move when taking your overall financial situation into account. -Mark Bole -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Dick Adams on October 26, 2008, 3:50 am Please log in for more thread options > I have a mortgage and also have enough cash to pay off > about half of the mortgage. > > What I want to do is do something where I create a > mortgage company and put my cash into it. Then the > company pays the bank off half the mortgage and gets > interest payments from me. > > Then I can still deduct the interest of the mortgage > payments from my income tax. Not really. On audit, the IRS could disallow the deduction of interest payments as self-dealing which means penalties and interest. Plus let could still tax your mortgage company on the payments received. > But the question is how would the company I own > calculate profit. I don't want it to show a profit > or tax has to be paid by that profit. There are many ways to do that, but it's just more penalties and interest. And never forget that there's no statute of limitations on tax fraud. Dick -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by D. Stussy on October 26, 2008, 10:34 am Please log in for more thread options > I have a mortgage and also have enough cash to pay off about half of > the mortgage. > > What I want to do is do something where I create a mortgage company > and put my cash into it. Then the company pays the bank off half the > mortgage and gets interest payments from me. > > Then I can still deduct the interest of the mortgage payments from my > income tax. > > But the question is how would the company I own calculate profit. I > don't want it to show a profit or tax has to be paid by that profit. About the only thing you haven't mentioned is moving the company offshore to a tax haven, perhaps the Cayman Islands. Then what I can say is you have all the ingredients for free room and board for a few years courtesy of Club Fed. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Free money for mortgage delinquents May 8, 2007, 12:52 am Mortgage Insurance on Reverse Mortgage March 13, 2009, 3:45 pm rental income + rental mortgage + rental mortgage interest - dazed /confused April 11, 2006, 3:50 am Gifting money January 25, 2007, 2:24 am Blood money March 2, 2009, 5:44 pm Pay tax on the money you loan from your company? 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