Q: I have a comment on a question you answered from a young reader who used her inheritance to purchase a condo for cash. She wanted to rent out the condo and purchase a town home.
Your column usually has great advice, but your answer to this question though, fell a little short of your normally high standards.
You advised the reader to take out a regular mortgage rather than a home equity line of credit (HELOC) was great. But I believe you misrepresented the tax break she would receive from the mortgage rather than the HELOC.
She would be able to write off the interest no matter which financing option she chooses. You might also have reminded your readers in general that paying cash for a property can have long term tax implications. Only $100,000 of a refinance mortgage on a property bought for cash is tax deductible.
A: Thanks for adding to the discussion.
See the original question at Using Inheritance For Start In Real Estate.
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