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Posted: 5/8/2024 8:32:43 PM EDT
[Last Edit: Primetime_1]
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Posted: 5/8/2024 8:38:48 PM EDT
[#1]
Income is money you earn, a loan has to be repaid, they aren't the same.
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Posted: 5/8/2024 8:42:26 PM EDT
[#2]
Well, my income is strapped with a 30+ percent tax, so I have to pay that much anyway.
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Posted: 5/8/2024 8:44:21 PM EDT
[#3]
Top bracket is 37%, why are you paying 38%?
If you’re in the top income tax bracket you shouldn’t need a loan. |
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Posted: 5/8/2024 8:44:41 PM EDT
[#4]
I personally would not take a loan against paid off properties.
Is your home paid off? |
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Posted: 5/8/2024 8:44:51 PM EDT
[#5]
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KY, USA
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Posted: 5/8/2024 8:45:36 PM EDT
[#6]
Why not buy more property and pay less taxes?
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Posted: 5/8/2024 8:46:40 PM EDT
[#7]
OP is on another level and I like it.
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Posted: 5/8/2024 8:48:39 PM EDT
[#8]
Quote HistoryOriginally Posted By WhiskersTheCat: OP is on another level and I like it. Yes, bit not that level. This is whack, even by GD standards. |
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Posted: 5/8/2024 8:49:00 PM EDT
[#9]
I'll pay the property taxes if I can inherit the properties when you pass.
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Posted: 5/8/2024 8:49:20 PM EDT
[#10]
I mean, you'd be using your property(s) as collateral for the HELOC, but if you got the cash... Hmm. Tagged
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Posted: 5/8/2024 8:50:38 PM EDT
[#11]
Do you need the 100k in one shot?
what are you going to pay the loan off with? |
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Posted: 5/8/2024 8:52:26 PM EDT
[#12]
There’s videos on using a HELOC to pay bills and your mortgage instead of your income.
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Posted: 5/8/2024 8:52:36 PM EDT
[#13]
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Posted: 5/8/2024 8:53:29 PM EDT
[#14]
Quote HistoryOriginally Posted By STJ: Do you need the 100k in one shot? what are you going to pay the loan off with? I was just going to spread it out over 12 months....the loan would be paid back with my regular income. My home is paid for, and an additional property. |
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OH, USA
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Posted: 5/8/2024 8:56:21 PM EDT
[#15]
Technically, if you're using it as income, you are using the LOC to pay itself back. Although unless you tell them they won't know, but I'm pretty sure it would be prohibited by the lender.
I'm assuming you are not 'working less' until you get the HELOC? In other words, don't slow your income until you get the $$. |
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Posted: 5/8/2024 8:57:42 PM EDT
[#16]
Quote HistoryOriginally Posted By STJ: what are you going to pay the loan off with? Another loan. OP is talking about buy, borrow, die. Idk OP, I guess you have to do the math. How much do you need to live a yr, how long will you live, how much equity do you have etc. I would think you would need a lot of equity to keep the cycle going. |
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VA, USA
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Posted: 5/8/2024 9:01:46 PM EDT
[#17]
Quote HistoryOriginally Posted By Primetime_1: Well, my income is strapped with a 30+ percent tax, so I have to pay that much anyway. So to be clear: You want to take out a loan, with interest, that you pay back monthly…to “subsidize” your income? |
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Posted: 5/8/2024 9:04:53 PM EDT
[#18]
Originally Posted By Primetime_1: I have two properties that are paid for, and I'm getting murdered on my income taxes. Thinking of taking out a $100k HELOC and just working $100k less....I'd be paying 8 percent interest instead of 38 percent income tax. I have enough liquid to repay the money if I lost my job....thoughts? I’m not seeing the benefit unless you’re a business owner. In that case, you could keep the money you would have paid yourself in the business, and perhaps figure a way to pay back the loan from the business itself at a later date. I’m not sure how you might structure that, but it seems like something reasonable to investigate. |
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SC, USA
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Posted: 5/8/2024 9:05:37 PM EDT
[#19]
What the hell are you doing with the 100k if your properties are paid for?
Just work less if you don’t want the high taxes |
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Posted: 5/8/2024 9:10:06 PM EDT
[#20]
Quote HistoryOriginally Posted By MHowski: Another loan. OP is talking about buy, borrow, die. Idk OP, I guess you have to do the math. How much do you need to live a yr, how long will you live, how much equity do you have etc. I would think you would need a lot of equity to keep the cycle going. Quote HistoryOriginally Posted By MHowski: Originally Posted By STJ: what are you going to pay the loan off with? Another loan. OP is talking about buy, borrow, die. Idk OP, I guess you have to do the math. How much do you need to live a yr, how long will you live, how much equity do you have etc. I would think you would need a lot of equity to keep the cycle going. |
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Posted: 5/8/2024 9:11:46 PM EDT
[#21]
This is an absolutely horrible idea, found in either the pits of economic hell run by Bernie Sanders or some random "get rich quick infinite money" TikTok influencer.
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Posted: 5/8/2024 9:15:50 PM EDT
[#22]
Sounds a bit goofy to me
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Posted: 5/8/2024 9:18:54 PM EDT
[#23]
That word you keep using, subsidize. I do not think it means what you think it means.
If you took out a HELOC for a down payment on a rental property - that would be subsidizing. What you described is just taking out a loan to live off of. |
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Posted: 5/8/2024 9:19:54 PM EDT
[Last Edit: ServusVeritatis]
[#24]
If you “NEED” money you need to get rid of some assets.
You say you can afford “this and that” but you’re trying to figure out how to “keep from getting murdered”…..sounds like you can’t afford it talking like that. Get rid of your properties or other liabilities that’s making you feel squeezed, |
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NC, USA
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Posted: 5/8/2024 9:20:01 PM EDT
[#25]
I’m confused.
You’re thinking about taking out a home equity loan at 8% for 100k, paying the 8% interest for what…12 years? At the same time, you’ll reduce your income by 100,000/year and lower your tax bracket? Obviously, not paying income tax on 100k for 12 years will save you a lot of $ but how will you compensate for that 100k after the 1st year? Are you going to take out a new 100k loan every year? If so, you would pay around 900k in interest over that 12 year period but only save around 400k in income tax. |
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Posted: 5/8/2024 9:26:06 PM EDT
[#26]
Umm if your making enough to pay that much taxes, it does not sound like you need to subsidize your income with a loan. It really sounds like you dont even need to do anything but work 100k less. Other wise its a neg sum gain due to interest.
Made up math. 400k income, work 100k less, income is 300k. 400k income, work 100k less, borrow 100k at 8%, pay back 108k. income 292k, but pay taxes on 300k, same as above but 8% less due to interest. what is your ballpark income? Can you dump money in to tax free savings, 401k, hsa etc |
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MS, USA
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Posted: 5/8/2024 9:26:24 PM EDT
[#27]
Can you please map this out on paper for me? I'm having a hard time following along with the concept.
thanks. |
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Posted: 5/8/2024 9:44:09 PM EDT
[#28]
Quote HistoryOriginally Posted By Wildfowler: Can you please map this out on paper for me? I'm having a hard time following along with the concept. thanks. hypothetical numbers....after IRA, HSA and charitable giving....we'll use 28 percent EFFECTIVE tax rate 550,000 * .28= 154,000 in taxes 450,000 * .28= 126,000 in taxes take a $100k HELOC at 8 percent and pay it back over 12 months is $100,000 in loaned money, plus $8k ish interest.... I get to use $550,000 and pay $134,000 to the king and the bank, versus $154,000 just to the king |
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Posted: 5/8/2024 9:46:45 PM EDT
[#29]
lol
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Posted: 5/8/2024 9:51:56 PM EDT
[#30]
Why the fuck did I bother with math. Op will make more money than me even if he does this.
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MS, USA
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Posted: 5/8/2024 9:54:34 PM EDT
[#31]
Quote HistoryOriginally Posted By Primetime_1: hypothetical numbers....after IRA, HSA and charitable giving....we'll use 28 percent EFFECTIVE tax rate 550,000 * .28= 154,000 in taxes 450,000 * .28= 126,000 in taxes take a $100k HELOC at 8 percent and pay it back over 12 months is $100,000 in loaned money, plus $8k ish interest.... I get to use $550,000 and pay $134,000 to the king and the bank, versus $154,000 just to the king How are you able to "use" all $550,000 if you have to pay back the $100,000 loan? Isn't that money already "used"? Plus an extra 8%? |
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Posted: 5/8/2024 9:54:39 PM EDT
[#32]
Originally Posted By Primetime_1: I have two properties that are paid for, and I'm getting murdered on my income taxes. Thinking of taking out a $100k HELOC and just working $100k less....I'd be paying 8 percent interest instead of 38 percent income tax. I have enough liquid to repay the money if I lost my job....thoughts?  Attached File |
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Posted: 5/8/2024 9:56:33 PM EDT
[#33]
OP also had an idea on how to save money on electricity costs:
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Posted: 5/8/2024 9:57:13 PM EDT
[#34]
Fuck it. OST.
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OK, USA
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Posted: 5/8/2024 9:59:16 PM EDT
[#35]
This makes no sense to me. Must be why I'm poor.
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Posted: 5/8/2024 10:00:02 PM EDT
[#36]
Can you get a heloc on a paid off property?
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Posted: 5/8/2024 10:00:39 PM EDT
[#37]
Balls!
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Posted: 5/8/2024 10:02:15 PM EDT
[#38]
Quote HistoryOriginally Posted By Primetime_1: hypothetical numbers....after IRA, HSA and charitable giving....we'll use 28 percent EFFECTIVE tax rate 550,000 * .28= 154,000 in taxes 450,000 * .28= 126,000 in taxes take a $100k HELOC at 8 percent and pay it back over 12 months is $100,000 in loaned money, plus $8k ish interest.... I get to use $550,000 and pay $134,000 to the king and the bank, versus $154,000 just to the king Quote HistoryOriginally Posted By Primetime_1: Originally Posted By Wildfowler: Can you please map this out on paper for me? I'm having a hard time following along with the concept. thanks. hypothetical numbers....after IRA, HSA and charitable giving....we'll use 28 percent EFFECTIVE tax rate 550,000 * .28= 154,000 in taxes 450,000 * .28= 126,000 in taxes take a $100k HELOC at 8 percent and pay it back over 12 months is $100,000 in loaned money, plus $8k ish interest.... I get to use $550,000 and pay $134,000 to the king and the bank, versus $154,000 just to the king 
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Posted: 5/8/2024 10:03:08 PM EDT
[#39]
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Posted: 5/8/2024 10:03:33 PM EDT
[#40]
Quote HistoryOriginally Posted By Primetime_1: hypothetical numbers....after IRA, HSA and charitable giving....we'll use 28 percent EFFECTIVE tax rate 550,000 * .28= 154,000 in taxes 450,000 * .28= 126,000 in taxes take a $100k HELOC at 8 percent and pay it back over 12 months is $100,000 in loaned money, plus $8k ish interest.... I get to use $550,000 and pay $134,000 to the king and the bank, versus $154,000 just to the king This must be a joke. |
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Posted: 5/8/2024 10:04:07 PM EDT
[#41]
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KY, USA
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Posted: 5/8/2024 10:04:37 PM EDT
[#42]
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Posted: 5/8/2024 10:04:38 PM EDT
[#43]
Quote HistoryOriginally Posted By Never_A_Wick: This must be a joke. Quote HistoryOriginally Posted By Never_A_Wick: Originally Posted By Primetime_1: hypothetical numbers....after IRA, HSA and charitable giving....we'll use 28 percent EFFECTIVE tax rate 550,000 * .28= 154,000 in taxes 450,000 * .28= 126,000 in taxes take a $100k HELOC at 8 percent and pay it back over 12 months is $100,000 in loaned money, plus $8k ish interest.... I get to use $550,000 and pay $134,000 to the king and the bank, versus $154,000 just to the king This must be a joke. Oh, I'm pretty sure it was not. |
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Posted: 5/8/2024 10:05:59 PM EDT
[#44]
In before the delete.
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Posted: 5/8/2024 10:07:14 PM EDT
[#45]
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MS, USA
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Posted: 5/8/2024 10:07:20 PM EDT
[#46]
Wait. What happened?
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Posted: 5/8/2024 10:08:01 PM EDT
[#47]
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Posted: 5/8/2024 10:08:07 PM EDT
[#48]
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Posted: 5/8/2024 10:08:22 PM EDT
[#49]
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Posted: 5/8/2024 10:08:45 PM EDT
[#50]
Per op request
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