But it’s not your cash to begin with.. it’s borrowed. And if it was taken on a primary.. your equity was just sitting there doing nothing anyway. Your primary isn’t earning money..[/quote]
Neither is the money your borrowed.
Let’s say you borrowed 500,000 at 3%. That’s costing you $15K per year.
Let’s say you put that 500,000 in a CD earning 4.25%. That’s 21,250
21250- 15K = 6250.
Say you pay 30% taxes, state and fed. 21250 x .30 = 6375. You’re underwater.
Let’s be very generous and say you pay 25% taxes, state and fed.
21250 x .25 = 5312. you made $900.[/quote]
You can deduct interest on a first mortgage on your primary
