Quote:
Originally Posted by Bertuzzied
Isn't that the reason why the US is in such trouble? Is because you can write off your mortgage interest, so everyone took on a mortgage even though they might not have needed one.
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It's one of the reasons for the problems in the States, but it's not the reason.
This is a bad decision. Being able to deduct this interest in this way is fair and the strategy is available to everyone. Most people could do this if they had arranged their financial affairs in such a way and make good financial decisions.
Say I borrow $100K and have a $100K mortgage. I could borrow the money and invest it, therefore tax deductible (if done correctly). However, if I use the $100K to pay off the mortgage and then borrow that money back to invest it's not deductible?
This will affect the Smith Maneuver and the Singleton Shuffle.
To answer edm88's question, it would presumably be because now you might be in a position to do this whereas before when the home was bought you were not in such a position.
I disagree with the Court's ruling. While in a way I sort of understand its position, I think their logic is mostly flawed.