Comments on: Help A Reader: Buy a House to Prevent Uncle Sam?

By: J. Money

J. Money — Fri, 21 Jun 2013 14:50:11 +0000

In reply to Wunderwriter. Great advice :)

By: Debt Blag

Debt Blag — Mon, 17 Jun 2013 19:30:43 +0000

In reply to Lance @ Money Life and More. Yeah, that's where it gets more interesting. Because then, you throw in depreciation expense...

By: Kyle @ Debt Free Diaries

Kyle @ Debt Free Diaries — Mon, 17 Jun 2013 19:30:40 +0000

Instead of buying a home, have you thought of purchasing a rental property instead? I believe (and I could be wrong, so check with a professional) that down payments on a rental home can be written off at least partially.

By: Mike@WeOnlyDoThisOnce

Mike@WeOnlyDoThisOnce — Mon, 17 Jun 2013 17:56:27 +0000

I’m also in favor of utilizing other tax shelter options and saving the purchase of a home for when it is truly a sincere decision.

By: Wunderwriter

Wunderwriter — Mon, 17 Jun 2013 16:34:01 +0000

Insanity comes to mind. Buying a home is an experience fraught with issues, emotional and financial. A difficult and expensive proposition at best, and during a mini “bubble” such as we’re experiencing now (as the result of artificially low interest rates), the market is full of investors attempting to cash in. If you don’t have a very, very good reason to throw yourself at the mercy of the system, why do it? He’s already a 1099, take out a business license and become self employed. Write off expenses, take the maximum for a self directed retirement account (there are many, many options here and I’m no expert), and KEEP RENTING!

By: Rob Wright

Rob Wright — Mon, 17 Jun 2013 15:24:34 +0000

I agree with most commenters here. It’s a bad idea to pay mortgage interest just to reduce your taxes. You are only getting benefit of the tax effect of the mortgage interest deduction. It you just want a deduction – donate to a charity. Same affect to your taxes.

Also, the Roth IRA is a great idea, but will not shelter current year taxes since there is not a current tax deduction for the contributions. A SEP IRA would be best.

By: MrsPoP @ PlantingOurPennies

MrsPoP @ PlantingOurPennies — Mon, 17 Jun 2013 15:06:56 +0000

In reply to Greg@ClubThrifty. This was exactly what I was thinking. You're likely to not see many immediate benefits, but add a lot of stress to your lives...

By: Shafi

Shafi — Mon, 17 Jun 2013 15:06:22 +0000

Many have said the same thing. Buying a house for the sake of interest deduction is not a good idea. In 2012, we paid $13,000 in mortgage interest, the government subsidized it with close to $3,000. The $10,000 difference is huge sum to put into some kind of other investments rather than buy a house. Plus the property tax plus the utilities, we paid more than $30,000 last year and for what? We know that most people use three rooms – bedroom, kitchen, and living room. For two people, that pretty much covers.

Find another reason to buy a house, not just simply interest deduction.

By: J. Money

J. Money — Mon, 17 Jun 2013 14:59:32 +0000

In reply to Holly. Agreed! My CPA saves me tons of money every year, not to mention all the advice she's given every time my life changes (which, at this rate, is like twice a year!). Well worth the money.

By: J. Money

J. Money — Mon, 17 Jun 2013 14:58:05 +0000

In reply to Derek.

YES!!! Man, can’t believe I missed that one – especially since I currently contribute to an SEP too! Jeez…. good catch. Going now to update the article ;)