The Bond

[Peggy D]

I know, I know. We've been over this many times, but I have a ?? and can't find the answer on SEARCH.

If you don't pay off the bond at time of purchase, is the interest you pay tax deductable?

Is it better to pay off the bond?

Thanks

[Dutchman]

NOT tax deductible. I don't think, and other posts in similar threads agree, it probably is not good to pay off the bond unless you just can't stand debt.

[drdodge]

look harder. there are many posts about bonds

drd

[SteveFromNY]

I know, I know. We've been over this many times, but I have a ?? and can't find the answer on SEARCH.

If you don't pay off the bond at time of purchase, is the interest you pay tax deductable?

Is it better to pay off the bond?

Thanks


Pardon my ignorance, but if you pay it time of purchase, is there any interest? I thought it accrued as you continued making payments, just like a mortgage.

[Peggy D]

Sorry Steve. I didn't look right to me after I re-read it.

If we purchase a home and choose not to pay the bond in full at time of purchase.

The payments I pay on the bond will have interest (like a mortgage) right?

Is that interest tax deductable?

If no deductable interest, should I pay the bond off or not? What is the advantage in

not paying off the bond.

[784caroline]

People have found ways to make the bond payment tax deductible..ie home equity loans etc while others I know simply take it as a deduction and plan to use the check they write to the tax collector as proof of payment. Not what I suggest but simply what I know is happening in this confusion.

Benefits of not paying the Bond, In todays real estate market if by any chance you had to sell a house bought in 2006 or later, I think you would be hard pressed to get the price you paid for you house plus the closing costs and any improvements you paid..never mind the additional $15-30K bond price you paid. Having a bond paid provides you peace of mind, saves you some money as long as you stay in the house, and makes you house more marketable, but in all likelihood you will lose money if the bond is fully paid and you have to sell in todays market. If you plan to stay for 20-30 years pay it off!

[Sidney Lanier]

People have found ways to make the bond payment tax deductible..ie home equity loans.



To my knowledge, this is the only legal way to make bond payments tax deductible....

From another point of view, buying a resale affords the possible opportunity to get a house on which the bond has been paid, meaning that a buyer does better in the market as it exists now (though personally I think the market is stronger now in TV than it was, say, last year, IMHO). We bought our house from a couple who had paid the bond in full at the time they had originally bought the house newly constructed, and their having done so in truth did not figure into our negotiating a price for the house.

[zcaveman]

If you pay off the bond and then sell the house, you can include the bond cost in the price of the house. While the house will be more expensive than others in the area, there is an incentive. The new buyer will have the bond cost included in the mortgage and will be able to get a legal tax deduction on the mortgage interest since the bond is no longer separate. I am sure that a Realtor would pitch the benefits of buying without a bond correctly.

When I paid my bond off, the person I gave the check to said to add the bond cost to the value of the house. But then it was 2001 and the bond was only $6000.

[drdodge]

IRS says bond payments are not deductable

drd

[Peggy D]

Thanks everyone.

Since we will be frogs when we move to TV, it might be best for us to pay the bond off.

I was just curious if there was any advantage in not doing so.

[villages07]

Peggy,

One piece of advice seen on this board was maybe to wait a year or two after you get here to pay it off. If, for some reason, you sell your Villages home in the first couple of years, you probably won't recoup the amount you spent to payoff the bond. Once you are comfortable with the house, neighborhood, lifestyle, etc....then pay it off and be debt free.

[Frangyomory]

We paid the bond off right away. It is like having a second mortgage with no benefits. If you ever decide to sell, great asset to have the bond paid off. Just mho.

How are you doing Peggy? My back is healing little at a time. Loved your card. I am still mostly home-bound but have been out to breakfast twice in last three weeks. Hope you and Nick are well.

[tkret]

How are you doing Peggy? My back is healing little at a time. Loved your card. I am still mostly home-bound but have been out to breakfast twice in last three weeks. Hope you and Nick are well.


Frangyomory,

Take care of that aching back. You're a nice lady so I'll advise you not to use the ointment that Daphne used on Niles... check it out and smile
http://www.youtube.com/watch?v=FgXDDyDYma8

[Frangyomory]

I am guessing it wasn't Bengay she used!!!!!

[tkret]

I am guessing it wasn't Bengay she used!!!!!


Frangyomory,
Good thing she only put it on his back! I'm sorry but I just couldn't resist that so slap me. :redface:

[Peggy D]

Frangyomory,

Take care of that aching back. You're a nice lady so I'll advise you not to use the ointment that Daphne used on Niles... check it out and smile
http://www.youtube.com/watch?v=FgXDDyDYma8


Tkret,

I know I'm highjacking my own thread--I LOVE Frasier reruns!!

Back to the subject--

We will be paying off the bond. This will be the very last house we purchase. I never want to go through selling a house again, no matter what the circumstances!!

BTW--the house is officially on the market as of Friday (again), and St Joseph is in the ground.

Wish us luck!!


Fran--I'll call you this week. Miss talking to you. So glad you're feeling better.