Tax-Deductible Interest

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Tax-Deductible Interest

Interest paid on certain loans that one may take off of one's taxable income. For example, in the United States, interest on mortgage loans and student loans are deductible, at least up to a certain limit. For example, if a person spends $1,200 in student loan interest in a year, he may reduce his taxable income by $1,200.
References in periodicals archive ?
Further, tax deductible interest payments make the Notes an attractive source of capital.
This election, which applies to the entire indebtedness, is made by reporting the interest on the tax return as business interest or other deductible interest, rather than qualified residence interest.
Congress reduced the tax benefit that financial institutions receive on acquiring these qualified exempt bonds by enacting section 291(a)(3), which reduces the deductible interest by 20%.
However, in the event of a refinancing of this mortgage, the permissible deductible interest only applies to the actual mortgage balance being refinanced.
The new proposal would phase out the 60-month limit on deductible interest and would allow higher earners to qualify for the tax break.
Owning a home and purchasing it with a low down payment loan can maximize tax deductible interest, increase homebuyer savings and provide the best tax shelter for most Americans.
12, 2013 /PRNewswire/ -- Swiss-based Tyco International is challenging a $1 billion tax bill assessed by the IRS based on the Service's view that cash transfers carried out within affiliates of the multinational company were not debt giving rise to deductible interest payments, but instead should have been treated as equity, giving rise to non-deductible dividends, according to U.
At first glance, it might seem that a minimal amount of stock should be issued, with the bulk of the corporation's capital coming from shareholder loans (to make corporate distributions either deductible interest expense or tax-free principal repayments).
If the client itemizes deductions, paying down a loan with deductible interest provides a risk-free rate of return effectively equal to the loan's interest rate minus the marginal rate of tax savings forgone.
The company uses words and phrases such as "may" and "offered" to identify forward-looking statements in this press release, including forward-looking statements regarding homeowners benefiting from federal, state and municipal tax credits and other incentives, such as tax deductible interest payments.
Specifically, Rhode Island now requires an addback of otherwise deductible interest and intangible expenses paid or accrued to related parties (RI Gen.
Often, it makes sense for you to use a home-equity loan to pay off credit card debt, converting high-rate nondeductible interest to lower-rate deductible interest.