[TrudyM]

Originally Posted by dirtbanker

Hmmm...I realize you pay the 4% in interest on the mortgage and then you get a tax deduction (not to be confused with a tax credit, where you would deduct the 4% paid on the tax owed), but don't you also have to pay income tax on that 8% return (income) on investments?

As long as you are sharing your financial wisdom...If your investments in the portfolio take a nose dive (lets say you invested in Seadrill and the recent crude oil prices have driven your holdings value down), would you be able to deduct those losses from your taxes? Would you have to sell the stock at the losing price to take the deduction?

Oh never mind...I could not sleep at night worrying about all that!

As I understand it and I am no expert you can only take a loss by selling a stock. You can however if you wait at least 30 days to repurchase at the lower rate realize the loss for tax purposes and the basis of the new purchase is the lower price. if you sell or buy a stock within 30 days of trading it the wash sale rules apply and you don't get to deduct the loss.