Business Property refinace proceeds tax implications
Hello; I'm a new user. I own a combination (60/40) business/primary residence property which has a large amount of equity, and a small amount of debt remaining. I wish to refinace the existing commerical mortage and obtain funds to use as a down payment for a new primary residence. What are the tax implications of the refinance? Are the proceeds (the amount above what I currently owe) taxable, and if so, at what rate?
Thanks for the help. Ollie2
Hi- Loan proceeds are not taxable as long as it is a true loan and must be repaid. The tax implications will be that you will be able to write off the interest on that loan against the property the loan is against. I assume you will convert the first property into 100% rental. The IRS can't keep track of all the billions of refi loans done each year, nor do they care to as it is irrelevant to income. YOu are only taxed on INCOME, hence "INCOME TAX"
[addsig]