Loan Officer Scare Tactic

[smshorttimer]

True. I was waiting for someone to call BS. Maybe it was inside-baseball humor. As the OP stated, it was internal and not intended for them.

[Eugene]

What if you can’t deduct mortgage interest because you keep hitting against AMT? People who can afford $600k houses are upper income and are more likely to run into this problem, in particular if you are single and have investment income as well as salary based income.

Mortgage interest and PMI on your primary residence are deductible for AMT purposes. (Property tax and state tax are not, unfortunately) If you’re hitting against AMT, it could even be beneficial to own. One dollar spent on mortgage interest reduces AMT by 26 cents, but it only reduces your regular tax by 15 or 25 cents, depending on tax bracket.

There is a neat tax calculator on http://www.hrblock.com/. Type in a few numbers and it will tell you right away how much you owe in taxes. It even knows how to calculate AMT. You can easily find out how much of a federal tax benefit you would get from owning a house.

[Eugene]

What if you can’t deduct mortgage interest because you keep hitting against AMT? People who can afford $600k houses are upper income and are more likely to run into this problem, in particular if you are single and have investment income as well as salary based income.

Mortgage interest and PMI on your primary residence are deductible for AMT purposes. (Property tax and state tax are not, unfortunately) If you’re hitting against AMT, it could even be beneficial to own. One dollar spent on mortgage interest reduces AMT by 26 cents, but it only reduces your regular tax by 15 or 25 cents, depending on tax bracket.

There is a neat tax calculator on http://www.hrblock.com/. Type in a few numbers and it will tell you right away how much you owe in taxes. It even knows how to calculate AMT. You can easily find out how much of a federal tax benefit you would get from owning a house.

[Eugene]

What if you can’t deduct mortgage interest because you keep hitting against AMT? People who can afford $600k houses are upper income and are more likely to run into this problem, in particular if you are single and have investment income as well as salary based income.

Mortgage interest and PMI on your primary residence are deductible for AMT purposes. (Property tax and state tax are not, unfortunately) If you’re hitting against AMT, it could even be beneficial to own. One dollar spent on mortgage interest reduces AMT by 26 cents, but it only reduces your regular tax by 15 or 25 cents, depending on tax bracket.

There is a neat tax calculator on http://www.hrblock.com/. Type in a few numbers and it will tell you right away how much you owe in taxes. It even knows how to calculate AMT. You can easily find out how much of a federal tax benefit you would get from owning a house.

[Eugene]

What if you can’t deduct mortgage interest because you keep hitting against AMT? People who can afford $600k houses are upper income and are more likely to run into this problem, in particular if you are single and have investment income as well as salary based income.

Mortgage interest and PMI on your primary residence are deductible for AMT purposes. (Property tax and state tax are not, unfortunately) If you’re hitting against AMT, it could even be beneficial to own. One dollar spent on mortgage interest reduces AMT by 26 cents, but it only reduces your regular tax by 15 or 25 cents, depending on tax bracket.

There is a neat tax calculator on http://www.hrblock.com/. Type in a few numbers and it will tell you right away how much you owe in taxes. It even knows how to calculate AMT. You can easily find out how much of a federal tax benefit you would get from owning a house.

[Eugene]

What if you can’t deduct mortgage interest because you keep hitting against AMT? People who can afford $600k houses are upper income and are more likely to run into this problem, in particular if you are single and have investment income as well as salary based income.

Mortgage interest and PMI on your primary residence are deductible for AMT purposes. (Property tax and state tax are not, unfortunately) If you’re hitting against AMT, it could even be beneficial to own. One dollar spent on mortgage interest reduces AMT by 26 cents, but it only reduces your regular tax by 15 or 25 cents, depending on tax bracket.

There is a neat tax calculator on http://www.hrblock.com/. Type in a few numbers and it will tell you right away how much you owe in taxes. It even knows how to calculate AMT. You can easily find out how much of a federal tax benefit you would get from owning a house.

[ucodegen]

Mortgage interest and PMI on your primary residence are deductible for AMT purposes.

I suggest you review tax code and form. There is an overriding 26% which removes all deductions. That is the one I have been hitting due to LTCG. Its at the bottom of the form where you calculate diff between taxed and 26% rate… and if amount is less than 26%, you pay 26%. (Unless less than 173k, at which point 28%). Also Mortgage deductions get added in on line 4, form 6251. It is not near as simple as above and as you make it. I have already run the numbers.. and I would not get the deductions.

I think you are assuming that I am clearing maybe a few thou $ at most in LTCG. Last year my LTCG was $37k after finding every possible loss in my portfolio to hide it (by selling the loss position and then buying back after 31 days). Tax year 2005, it was nearly $60,000 in LTCG (after doing the same with negative positions). The combination of 15% rate on LTCG and taking the resulting CA income tax as a deduction really alters the picture. (California taxes LTCG as income at 9.3% which is deductible on the fed by itemizing).

[ucodegen]

Mortgage interest and PMI on your primary residence are deductible for AMT purposes.

I suggest you review tax code and form. There is an overriding 26% which removes all deductions. That is the one I have been hitting due to LTCG. Its at the bottom of the form where you calculate diff between taxed and 26% rate… and if amount is less than 26%, you pay 26%. (Unless less than 173k, at which point 28%). Also Mortgage deductions get added in on line 4, form 6251. It is not near as simple as above and as you make it. I have already run the numbers.. and I would not get the deductions.

I think you are assuming that I am clearing maybe a few thou $ at most in LTCG. Last year my LTCG was $37k after finding every possible loss in my portfolio to hide it (by selling the loss position and then buying back after 31 days). Tax year 2005, it was nearly $60,000 in LTCG (after doing the same with negative positions). The combination of 15% rate on LTCG and taking the resulting CA income tax as a deduction really alters the picture. (California taxes LTCG as income at 9.3% which is deductible on the fed by itemizing).

[ucodegen]

Mortgage interest and PMI on your primary residence are deductible for AMT purposes.

I suggest you review tax code and form. There is an overriding 26% which removes all deductions. That is the one I have been hitting due to LTCG. Its at the bottom of the form where you calculate diff between taxed and 26% rate… and if amount is less than 26%, you pay 26%. (Unless less than 173k, at which point 28%). Also Mortgage deductions get added in on line 4, form 6251. It is not near as simple as above and as you make it. I have already run the numbers.. and I would not get the deductions.

I think you are assuming that I am clearing maybe a few thou $ at most in LTCG. Last year my LTCG was $37k after finding every possible loss in my portfolio to hide it (by selling the loss position and then buying back after 31 days). Tax year 2005, it was nearly $60,000 in LTCG (after doing the same with negative positions). The combination of 15% rate on LTCG and taking the resulting CA income tax as a deduction really alters the picture. (California taxes LTCG as income at 9.3% which is deductible on the fed by itemizing).

[ucodegen]

Mortgage interest and PMI on your primary residence are deductible for AMT purposes.

I suggest you review tax code and form. There is an overriding 26% which removes all deductions. That is the one I have been hitting due to LTCG. Its at the bottom of the form where you calculate diff between taxed and 26% rate… and if amount is less than 26%, you pay 26%. (Unless less than 173k, at which point 28%). Also Mortgage deductions get added in on line 4, form 6251. It is not near as simple as above and as you make it. I have already run the numbers.. and I would not get the deductions.

I think you are assuming that I am clearing maybe a few thou $ at most in LTCG. Last year my LTCG was $37k after finding every possible loss in my portfolio to hide it (by selling the loss position and then buying back after 31 days). Tax year 2005, it was nearly $60,000 in LTCG (after doing the same with negative positions). The combination of 15% rate on LTCG and taking the resulting CA income tax as a deduction really alters the picture. (California taxes LTCG as income at 9.3% which is deductible on the fed by itemizing).

[ucodegen]

Mortgage interest and PMI on your primary residence are deductible for AMT purposes.

I suggest you review tax code and form. There is an overriding 26% which removes all deductions. That is the one I have been hitting due to LTCG. Its at the bottom of the form where you calculate diff between taxed and 26% rate… and if amount is less than 26%, you pay 26%. (Unless less than 173k, at which point 28%). Also Mortgage deductions get added in on line 4, form 6251. It is not near as simple as above and as you make it. I have already run the numbers.. and I would not get the deductions.

I think you are assuming that I am clearing maybe a few thou $ at most in LTCG. Last year my LTCG was $37k after finding every possible loss in my portfolio to hide it (by selling the loss position and then buying back after 31 days). Tax year 2005, it was nearly $60,000 in LTCG (after doing the same with negative positions). The combination of 15% rate on LTCG and taking the resulting CA income tax as a deduction really alters the picture. (California taxes LTCG as income at 9.3% which is deductible on the fed by itemizing).

[Eugene]

Form 6251 line 4 contains “mortgage deduction adjustment”, calculated using the worksheet on page 2 of instructions. If mortgage is for your main home or your second home, adjustment will likely be 0.

If you’re itemizing your deductions:

– form 1040 line 38 contains your AGI
– form 1040 line 41 contains your AGI less itemized deductions (mortgage interest, state tax, property tax, charitable donations, etc. etc.)
– it’s copied to form 6251, line 1
– most itemized deductions EXCEPT MORTGAGE INTEREST get added back for the purposes of computing AMT; for example, state tax and property tax are added back on line 3.

So, if you own a house, your AMT is reduced by at least 26% of the entire amount you paid in interest, but your regular tax is only reduced by the amount of interest in excess of standard deduction, times your tax bracket.

[Eugene]

Form 6251 line 4 contains “mortgage deduction adjustment”, calculated using the worksheet on page 2 of instructions. If mortgage is for your main home or your second home, adjustment will likely be 0.

If you’re itemizing your deductions:

– form 1040 line 38 contains your AGI
– form 1040 line 41 contains your AGI less itemized deductions (mortgage interest, state tax, property tax, charitable donations, etc. etc.)
– it’s copied to form 6251, line 1
– most itemized deductions EXCEPT MORTGAGE INTEREST get added back for the purposes of computing AMT; for example, state tax and property tax are added back on line 3.

So, if you own a house, your AMT is reduced by at least 26% of the entire amount you paid in interest, but your regular tax is only reduced by the amount of interest in excess of standard deduction, times your tax bracket.

[Eugene]

Form 6251 line 4 contains “mortgage deduction adjustment”, calculated using the worksheet on page 2 of instructions. If mortgage is for your main home or your second home, adjustment will likely be 0.

If you’re itemizing your deductions:

– form 1040 line 38 contains your AGI
– form 1040 line 41 contains your AGI less itemized deductions (mortgage interest, state tax, property tax, charitable donations, etc. etc.)
– it’s copied to form 6251, line 1
– most itemized deductions EXCEPT MORTGAGE INTEREST get added back for the purposes of computing AMT; for example, state tax and property tax are added back on line 3.

So, if you own a house, your AMT is reduced by at least 26% of the entire amount you paid in interest, but your regular tax is only reduced by the amount of interest in excess of standard deduction, times your tax bracket.

[Eugene]

Form 6251 line 4 contains “mortgage deduction adjustment”, calculated using the worksheet on page 2 of instructions. If mortgage is for your main home or your second home, adjustment will likely be 0.

If you’re itemizing your deductions:

– form 1040 line 38 contains your AGI
– form 1040 line 41 contains your AGI less itemized deductions (mortgage interest, state tax, property tax, charitable donations, etc. etc.)
– it’s copied to form 6251, line 1
– most itemized deductions EXCEPT MORTGAGE INTEREST get added back for the purposes of computing AMT; for example, state tax and property tax are added back on line 3.

So, if you own a house, your AMT is reduced by at least 26% of the entire amount you paid in interest, but your regular tax is only reduced by the amount of interest in excess of standard deduction, times your tax bracket.

[Author]

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