Reply to Second home purchase - Where do I take the money from?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]OP - I know using cash is the obvious easy choice but because I now have near nothing as a right-off for taxes, I was thinking more on the line of using money (or some of it) from my $100,000. stock account and simply using the new mortgage interest to help offset the taxes I'lll owe on the stock sale. Purchasing this second home is NOT simply for the tax right off's.

At this point I have no plans for needing funds from either of my two investment accounts. I guess I'm just looking for ways to use it without costing me an arm and a leg in taxes and at the same time keep a nice healthy cash amount in the bank. [/quote]

This doesn't really make sense.  Could you try to explain what you mean?

There is no tax advantage to using your investment accounts for a downpayment as opposed to your savings account.  If anything, the investment account will likely result in more taxes right now, as there will (likely) be greater capital gains on any investment sales.  As long as the downpayment is the same amount, the loan will be the same amount, and the mortgage interest will be the same amount.

(Also, not to be nitpicky but just to let you know as an FYI, it's "write off", as in write it off as a deduction.  Not "right off.")[/quote]

Agree. The source of the down payment has really nothing to do with the house purchase. If you cash out investments you will (presumably) have capital gains. It will have no impact on your mortgage interest deduction. Frankly I'd wait a while before incurring capital gains because lowering the CG rate is a centerpiece of the Trump tax plan. Might as well take advantage of that.

What do you need money in the bank for? Seems like $200k would be an adequate cash holding, and you'll still have the same amount of total money if you needed to get it out.[/quote]

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