scheming concept for good deal

[patb]

interesting.

so if the price is 555,000, you would offer 55K down
and $500,000/360 per month in payments?

now if the IRS wanted to assume Imputed Interest?
would they discount to the 30 year Interest rate?

or would the buyer be required to report the capital gains on the sale, pay that at 18% and the payment is over time?

would the seller be able to deduct payments assuming
a 30 year interest rate?

[CA renter]

[quote=patb]interesting.

so if the price is 555,000, you would offer 55K down
and $500,000/360 per month in payments?

now if the IRS wanted to assume Imputed Interest?
would they discount to the 30 year Interest rate?

or would the buyer be required to report the capital gains on the sale, pay that at 18% and the payment is over time?

would the seller be able to deduct payments assuming
a 30 year interest rate?[/quote]

Wow. Exactly why can’t someone get a 0% loan? Are they afraid the banks might lose some business?

I was asking a (financial consultant) friend about using money in an IRA for a mortgage. Right now, the IRA gets less than 1% on the MM funds, and I thought it would be a good idea to use the money for a mortgage, pay the IRA back at 3%, which is more than what it’s getting now (good for me!) and I’d be paying less than what the current mortgage rates are (good for me, again!). Nope, apparently it’s not okay to give yourself a “below market” rate from your own IRA (among other issues).

What a great country. The Fed/govt has severely punished anyone who was prudent and stayed out of debt/saved by pushing rates down near 1% for the better part of the past decade. When we try to use that to our advantage, we get slapped down again. It’s obvious who our govt is serving, and it’s not us.

Sounds like the banks have fixed everything to thier advantage.

[CA renter]

[quote=patb]interesting.

so if the price is 555,000, you would offer 55K down
and $500,000/360 per month in payments?

now if the IRS wanted to assume Imputed Interest?
would they discount to the 30 year Interest rate?

or would the buyer be required to report the capital gains on the sale, pay that at 18% and the payment is over time?

would the seller be able to deduct payments assuming
a 30 year interest rate?[/quote]

Wow. Exactly why can’t someone get a 0% loan? Are they afraid the banks might lose some business?

I was asking a (financial consultant) friend about using money in an IRA for a mortgage. Right now, the IRA gets less than 1% on the MM funds, and I thought it would be a good idea to use the money for a mortgage, pay the IRA back at 3%, which is more than what it’s getting now (good for me!) and I’d be paying less than what the current mortgage rates are (good for me, again!). Nope, apparently it’s not okay to give yourself a “below market” rate from your own IRA (among other issues).

What a great country. The Fed/govt has severely punished anyone who was prudent and stayed out of debt/saved by pushing rates down near 1% for the better part of the past decade. When we try to use that to our advantage, we get slapped down again. It’s obvious who our govt is serving, and it’s not us.

Sounds like the banks have fixed everything to thier advantage.

[CA renter]

[quote=patb]interesting.

so if the price is 555,000, you would offer 55K down
and $500,000/360 per month in payments?

now if the IRS wanted to assume Imputed Interest?
would they discount to the 30 year Interest rate?

or would the buyer be required to report the capital gains on the sale, pay that at 18% and the payment is over time?

would the seller be able to deduct payments assuming
a 30 year interest rate?[/quote]

Wow. Exactly why can’t someone get a 0% loan? Are they afraid the banks might lose some business?

I was asking a (financial consultant) friend about using money in an IRA for a mortgage. Right now, the IRA gets less than 1% on the MM funds, and I thought it would be a good idea to use the money for a mortgage, pay the IRA back at 3%, which is more than what it’s getting now (good for me!) and I’d be paying less than what the current mortgage rates are (good for me, again!). Nope, apparently it’s not okay to give yourself a “below market” rate from your own IRA (among other issues).

What a great country. The Fed/govt has severely punished anyone who was prudent and stayed out of debt/saved by pushing rates down near 1% for the better part of the past decade. When we try to use that to our advantage, we get slapped down again. It’s obvious who our govt is serving, and it’s not us.

Sounds like the banks have fixed everything to thier advantage.

[CA renter]

[quote=patb]interesting.

so if the price is 555,000, you would offer 55K down
and $500,000/360 per month in payments?

now if the IRS wanted to assume Imputed Interest?
would they discount to the 30 year Interest rate?

or would the buyer be required to report the capital gains on the sale, pay that at 18% and the payment is over time?

would the seller be able to deduct payments assuming
a 30 year interest rate?[/quote]

Wow. Exactly why can’t someone get a 0% loan? Are they afraid the banks might lose some business?

I was asking a (financial consultant) friend about using money in an IRA for a mortgage. Right now, the IRA gets less than 1% on the MM funds, and I thought it would be a good idea to use the money for a mortgage, pay the IRA back at 3%, which is more than what it’s getting now (good for me!) and I’d be paying less than what the current mortgage rates are (good for me, again!). Nope, apparently it’s not okay to give yourself a “below market” rate from your own IRA (among other issues).

What a great country. The Fed/govt has severely punished anyone who was prudent and stayed out of debt/saved by pushing rates down near 1% for the better part of the past decade. When we try to use that to our advantage, we get slapped down again. It’s obvious who our govt is serving, and it’s not us.

Sounds like the banks have fixed everything to thier advantage.

[CA renter]

[quote=patb]interesting.

so if the price is 555,000, you would offer 55K down
and $500,000/360 per month in payments?

now if the IRS wanted to assume Imputed Interest?
would they discount to the 30 year Interest rate?

or would the buyer be required to report the capital gains on the sale, pay that at 18% and the payment is over time?

would the seller be able to deduct payments assuming
a 30 year interest rate?[/quote]

Wow. Exactly why can’t someone get a 0% loan? Are they afraid the banks might lose some business?

I was asking a (financial consultant) friend about using money in an IRA for a mortgage. Right now, the IRA gets less than 1% on the MM funds, and I thought it would be a good idea to use the money for a mortgage, pay the IRA back at 3%, which is more than what it’s getting now (good for me!) and I’d be paying less than what the current mortgage rates are (good for me, again!). Nope, apparently it’s not okay to give yourself a “below market” rate from your own IRA (among other issues).

What a great country. The Fed/govt has severely punished anyone who was prudent and stayed out of debt/saved by pushing rates down near 1% for the better part of the past decade. When we try to use that to our advantage, we get slapped down again. It’s obvious who our govt is serving, and it’s not us.

Sounds like the banks have fixed everything to thier advantage.

[clearfund]

It is true you cannot use your IRA for ‘self dealing’. However, I doubt it would be noticed if I loaned you $500k at 2% from my IRA and you loaned me $500k from your IRA at 2% for our mortgages?

We buy land with clients in their IRAs (after converting to a self directed IRA) and make private 1st TD’s with their IRA/401k funds all the time and they love it.

They all get the added bonus of feeling like they are ‘sticking it to the man’ in addition to making an invesment outside of the control of the Wall St cartel.

[clearfund]

It is true you cannot use your IRA for ‘self dealing’. However, I doubt it would be noticed if I loaned you $500k at 2% from my IRA and you loaned me $500k from your IRA at 2% for our mortgages?

We buy land with clients in their IRAs (after converting to a self directed IRA) and make private 1st TD’s with their IRA/401k funds all the time and they love it.

They all get the added bonus of feeling like they are ‘sticking it to the man’ in addition to making an invesment outside of the control of the Wall St cartel.

[clearfund]

It is true you cannot use your IRA for ‘self dealing’. However, I doubt it would be noticed if I loaned you $500k at 2% from my IRA and you loaned me $500k from your IRA at 2% for our mortgages?

We buy land with clients in their IRAs (after converting to a self directed IRA) and make private 1st TD’s with their IRA/401k funds all the time and they love it.

They all get the added bonus of feeling like they are ‘sticking it to the man’ in addition to making an invesment outside of the control of the Wall St cartel.

[clearfund]

It is true you cannot use your IRA for ‘self dealing’. However, I doubt it would be noticed if I loaned you $500k at 2% from my IRA and you loaned me $500k from your IRA at 2% for our mortgages?

We buy land with clients in their IRAs (after converting to a self directed IRA) and make private 1st TD’s with their IRA/401k funds all the time and they love it.

They all get the added bonus of feeling like they are ‘sticking it to the man’ in addition to making an invesment outside of the control of the Wall St cartel.

[clearfund]

It is true you cannot use your IRA for ‘self dealing’. However, I doubt it would be noticed if I loaned you $500k at 2% from my IRA and you loaned me $500k from your IRA at 2% for our mortgages?

We buy land with clients in their IRAs (after converting to a self directed IRA) and make private 1st TD’s with their IRA/401k funds all the time and they love it.

They all get the added bonus of feeling like they are ‘sticking it to the man’ in addition to making an invesment outside of the control of the Wall St cartel.

[scaredyclassic]

FROM SOME WEBSITE….

The same position is taken with personal, business and mortgage loans. Once again, it might be beneficial for a seller to increase his sales price and offer a low interest rate so he may profit from a lower tax liability. To prevent this from happening, the IRS requires that an applicable federal rate (AFR) be applied to all loans of six or more month’s duration. The AFR is published monthly, and determines the minimum amount of interest that should be assigned to different types of loans and investment vehicles.

If a person charges less than the AFR, the amount of interest that should have been charged is determined using the federal rate. This is the amount that the recipient will claim as income. If the interest paid qualifies as a deduction, such as a business loan or property mortgage, that is the amount the payer will show on his tax return. The difference between the actual interest and the imputed interest will be deducted from the principal of the note.

For example, if a person receives a one-year, zero interest loan of $20,000 US Dollars (USD), his loan will be adjusted for tax purposes to show both principal and interest. If the AFR for that type of loan is 10%, then the $20,000 USD repayment will be reclassified as a principal payment of $18,182 USD and an interest payment of $1818 USD. The loan would be considered paid in full, but the lender would be required to report the imputed interest as income. If the loan interest qualified as a tax deduction, the borrower would claim an $1818 USD deduction.

SO IS THE BOTTOM LINE

that the payment would be the same, and just some of it would be deemed interest and some principal?

[scaredyclassic]

FROM SOME WEBSITE….

The same position is taken with personal, business and mortgage loans. Once again, it might be beneficial for a seller to increase his sales price and offer a low interest rate so he may profit from a lower tax liability. To prevent this from happening, the IRS requires that an applicable federal rate (AFR) be applied to all loans of six or more month’s duration. The AFR is published monthly, and determines the minimum amount of interest that should be assigned to different types of loans and investment vehicles.

If a person charges less than the AFR, the amount of interest that should have been charged is determined using the federal rate. This is the amount that the recipient will claim as income. If the interest paid qualifies as a deduction, such as a business loan or property mortgage, that is the amount the payer will show on his tax return. The difference between the actual interest and the imputed interest will be deducted from the principal of the note.

For example, if a person receives a one-year, zero interest loan of $20,000 US Dollars (USD), his loan will be adjusted for tax purposes to show both principal and interest. If the AFR for that type of loan is 10%, then the $20,000 USD repayment will be reclassified as a principal payment of $18,182 USD and an interest payment of $1818 USD. The loan would be considered paid in full, but the lender would be required to report the imputed interest as income. If the loan interest qualified as a tax deduction, the borrower would claim an $1818 USD deduction.

SO IS THE BOTTOM LINE

that the payment would be the same, and just some of it would be deemed interest and some principal?

[scaredyclassic]

FROM SOME WEBSITE….

The same position is taken with personal, business and mortgage loans. Once again, it might be beneficial for a seller to increase his sales price and offer a low interest rate so he may profit from a lower tax liability. To prevent this from happening, the IRS requires that an applicable federal rate (AFR) be applied to all loans of six or more month’s duration. The AFR is published monthly, and determines the minimum amount of interest that should be assigned to different types of loans and investment vehicles.

If a person charges less than the AFR, the amount of interest that should have been charged is determined using the federal rate. This is the amount that the recipient will claim as income. If the interest paid qualifies as a deduction, such as a business loan or property mortgage, that is the amount the payer will show on his tax return. The difference between the actual interest and the imputed interest will be deducted from the principal of the note.

For example, if a person receives a one-year, zero interest loan of $20,000 US Dollars (USD), his loan will be adjusted for tax purposes to show both principal and interest. If the AFR for that type of loan is 10%, then the $20,000 USD repayment will be reclassified as a principal payment of $18,182 USD and an interest payment of $1818 USD. The loan would be considered paid in full, but the lender would be required to report the imputed interest as income. If the loan interest qualified as a tax deduction, the borrower would claim an $1818 USD deduction.

SO IS THE BOTTOM LINE

that the payment would be the same, and just some of it would be deemed interest and some principal?

[scaredyclassic]

FROM SOME WEBSITE….

The same position is taken with personal, business and mortgage loans. Once again, it might be beneficial for a seller to increase his sales price and offer a low interest rate so he may profit from a lower tax liability. To prevent this from happening, the IRS requires that an applicable federal rate (AFR) be applied to all loans of six or more month’s duration. The AFR is published monthly, and determines the minimum amount of interest that should be assigned to different types of loans and investment vehicles.

If a person charges less than the AFR, the amount of interest that should have been charged is determined using the federal rate. This is the amount that the recipient will claim as income. If the interest paid qualifies as a deduction, such as a business loan or property mortgage, that is the amount the payer will show on his tax return. The difference between the actual interest and the imputed interest will be deducted from the principal of the note.

For example, if a person receives a one-year, zero interest loan of $20,000 US Dollars (USD), his loan will be adjusted for tax purposes to show both principal and interest. If the AFR for that type of loan is 10%, then the $20,000 USD repayment will be reclassified as a principal payment of $18,182 USD and an interest payment of $1818 USD. The loan would be considered paid in full, but the lender would be required to report the imputed interest as income. If the loan interest qualified as a tax deduction, the borrower would claim an $1818 USD deduction.

SO IS THE BOTTOM LINE

that the payment would be the same, and just some of it would be deemed interest and some principal?

[Author]

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