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11-28-2020, 12:48 PM
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Sage
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Join Date: Aug 2009
Location: NJ, NM, SC, PA, DC, MD, VA, NY, CA, ID and finally FL.
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Quote:
Originally Posted by donfey
The bond is financed and is the same as any other loan. If you're making more money, net, in some investment, why would you use that money to pay off the bond "loan?"
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As I understand it the interest a homeowner pays on the bond is not tax deductible. Most investment income other than municipal bond interest is taxable either at regular income or capital gain rates; municipal bond interest may be subject to tax if one pays AMT. If bond interest is 5% one needs to net 5% after taxes just to pay the bond interest. One would likely need to securely earn at least 10% before taxes to make it worthwhile IMHO which might be pretty difficult to accomplish.
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