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Interest payments on student loans, mortgages and business loans can be reported as tax deductions. However, personal loan interest payments only qualify as tax deductible under certain circumstances.
Interest payments on student loans, mortgages and business loans can be reported as tax deductions. However, personal loan interest payments only qualify as tax-deductible under certain circumstances.
Recourse debt or recourse loan is a debt that is backed by both collateral from the debtor, and by personal liability of the debtor. [2] This type of debt allows the lender to collect from the debtor and the debtor's assets in the case of default, in addition to foreclosing on a particular property or asset as with a home loan or auto loan.
Bankruptcy – All debts discharged under a certain bankruptcy are regarded as non-taxable income. Non-recourse loans – In case of non-recourse loans, lenders repossess the property signed as collateral by the borrower as a remedy to resolve the loan repayment default. However, lenders are barred from pursuing their borrowers for the ...
The loan was for a dependent: If you took out a loan in your own name for someone else like a child or other dependent, you can take the student loan interest deduction.
A loan by itself is neither gross income to the borrower, nor a tax deduction to the lender. This is because there is "symmetry" of assets and liabilities on both side: the borrower's increased wealth when the loan is taken out is offset by an obligation to repay that same amount.
When you file your taxes, you can claim the standard deduction or choose to itemize. However, recent changes in tax law have dramatically reduced the percentage of Americans who itemize. For You:...
However, because the collateral of a HELOC is the home, failure to repay the loan or meet loan requirements may result in foreclosure. As a result, lenders generally require that the borrower maintain a certain level of equity in the home as a condition of providing a home equity line, usually a minimum of 15-20%. [3]