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 ?
Or in other words, Rogers says, “businesses will subtract depreciation and amortization from their earnings before calculating their maximum deductible interest payments.”
taxes by paying deductible interest to the new foreign parent or one of its foreign affiliates in a low-tax country.
Those structures can be abusive when employed by related parties by turning nondeductible dividends into deductible interest.
Of course, it is not; however, a tax preparer can provide advice on negotiating or paying down the debt, making a household budget, transferring the debt to a home equity loan with deductible interest, or even entering personal bankruptcy.
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%.
(7) Any deductible interest expense will also be subject to the general limit on otherwise allowable investment interest expense deductions-see Q 1304.
It would do so by disallowing a proportionate amount of deductible interest expenses for unrelated borrowing, they argue.
Considering the conversational energy we expend on real estate, it's a wonder there haven't been more comedies about buying and selling, deductible interest and subprime mortgages.
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.