All Forum Posts by: James Maher

Good questions. You are certainly able to deduct mortgage interest, taxes, etc. I'm not sure where your allowable deductions end though.

Take out a loan from your 401k and put that money into your wallet. Now, pay back the loan with that same money. You are NOT taxed twice on the loan, only the interest. Also, you are paying yourself interest instead of a bank!  

@Brian Eastman I have to disagree with the statement about a 401k loan being expensive. Yes you put money in pre-tax and pay back with after tax funds, but the money you take out is pre-tax so it ends up being a wash. Basically you are just paying taxes on the money you use which you have to do anyways. 

Another question, does the title company check the loan payoff?  On this property, based off of when it was bought and the fact that it's in pre-foreclosure I just don't see how the loan payoff could be LESS than or equal to the asking price.  Is it possible to get into a situation where the asking price is less than the loan payoff and I would be in trouble when it comes time to close?

I talked with a wholesaler that has a preforeclosure under contract.  What steps can I take to ensure I'm not wasting my time and there aren't multiple liens on the property?  The rent coming in should be about double the mortgage so I'm struggling to figure out how it has become a preforeclosure and it has me worried that there may be more going on and they are just trying to sell it cheap.  I know I need to check the rent roll and all other due diligence, I just want to make sure that I don't get to the closing table and get hit with a bunch of surprises on the title.

Agreed, that's what I thought. I have no clue why the sentence in this book was written that way. Maybe it is confusing and the end of you residency can be interpreted as when you first lived there.

I'm reading a book and the author mentions the primary residence capital gains exclusion. Either it is worded weird or he is just flat out wrong. The book states that you can live in a house for 2 years and rent it for 3 years and then sell it as long as it is sold within the 5 year mark from when you first lived in it as your primary. Is this just an odd wording or what? The sentence makes it sound like if you lived in a property for 10 years and rented it out for 3 that you would pay capital gains upon the sale.

@Daria B.  The advantage is so that you can depreciate other items more quickly than the building.

@Brandon Hall Correct, I'm not talking about separating the building from the land, I assumed that was a given.  I'm talking about segregating personal property from real property.

@Brandon Hall I am referencing Tom Wheelwright's book Tax-Free Wealth where he mentions that it is technically required by law.  If what he says is true ( I can't find it in Form 3115) that the IRS sees going from non-segregation to segregation as a move from an incorrect accounting method to a correct accounting method, one would have to believe that it is required.