Practical Perspectives: Key financial issues for you and your family — New homeowners ponder tax impact of their mortgage
Abstract: This issue’s “Practical Perspectives” discusses the case of Bradley and Melissa, who recently bought a house. With the closing behind them, the couple sat down with their financial advisor to discuss the tax impact of their mortgage. Their advisor began by noting that they had picked a good time to buy a house — at least from one tax perspective. The advisor explained the distinction between asset debt and equity debt, and pointed out that the IRS has come to be more lenient regarding the deductibility of the latter. This could be helpful if Bradley and Melissa decided to refinance in the future.