Quote:
Originally Posted by manaboutown
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Since the interest and fees on the bond are not tax deductible one would need to earn - risk free - in excess of 4.8% AFTER TAXES in order to justify not paying off the bond. At least from an income viewpoint. Of course if one pays off the bond and turns around and sells the house one would be unable to price the house sufficiently higher than competing for sale homes with bonds to recover the paid off bond principal.
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I would just point out that, for most retired people, tax deductible interest is a non-issue. With the new standard tax deductions, most people are not able to take advantage of itemized deductions. I cannot itemize any deductions, whether I pay the bond interest or not, even if it were deductible.