Our retirement accounts are doing well. We have a car loan for the first time in, well, I don't know how long, but we're okay with that.
Cash v. Credit cards (this now contains the $22,000 second mortgage on the apartment building) - $37,405
Retirement - $182,255 ($63,014 in Roth accts, $119,241 in pre-tax accts)
Real Estate equity - $111,190
Stocks - $2,282
529 - $6,197
auto loan - $15,000
Total net worth - $249,519 (up $30,000 or 14% since June 2009, up $75,000 or 43% since the beginning of 2009)
What isn't counted in our net worth -
- The value of our vehicles. Right now worth an estimated $19,000-$20,000. We do count car debt, but it's too much work to track the value of vehicles.
- The value of the maintenance/emergency account for our investment property. Current balance of ~$2,800.
- The value of the maintenance/emergency account for our house. Soon to be zero as we are having a large attic insulation/asbestos abatement/wiring project going on here next week that will cost about $6,000.
- The money we have set aside for bi-annual property taxes and annual life insurance payments.
- Personal property. We don't count furniture, antiques, art, jewelry, or really any assets that aren't either real estate, cash, or in form that is traded freely on the open markets (stocks, bonds, funds, etc).
5 comments:
Hello,
I'm a CPA and I have never heard of the IRS allowing a deduction for credit card interest, even if it's for a real estate investment. They used to back in the Reagan days, but not anymore. Interest on a mortgage and home equity loan are obviously deductible, and even on a line of credit if it's used to either purchase a home or used for capital improvements to a home. Not on a credit card though!
I encourage you to google it because there is a lot of advice on the internet (and from our own tax adviser) that interest expenses used to purchase investments is deductible.
I also know quite a few real estate investors that charge items such as appliances and cabinets on their business cards and deduct the expenses. I've never heard of this not being legal.
Sorry but Mike is right, you cannot deduct interest on a credit card even if the balance was initially a real estate purchase. As for those investors you reference, they can deduct the purchase price of renovation materials but not the interest. And the converse of this tax rule is true as well: consumer purchases made on a credit card can be paid off with a home equity loan and then that interest is deductible. What matters is that the CURRENT loan is one secured by the house.
Wow, I'm going to contact my tax guy again, but every single page I've googled that references business credit cards and interest says I can deduct it. I've deducted fees on business cards in the past with no issues as well either.
I've never seen ANY exclusion that says interest on credit cards is never tax deductible. I have coworkers who own small businesses that I will ask as well... it wouldn't make sense that you could deduct interest for a small business loan or a car loan for your business, but not business credit card interest? What about interest you pay to a contractor that did work on your property?
Good for you on your progress. We are making progress but we have massive student loan debt that keeps us in the negative range. WE hope to change that soon. But, we are living in our means and are consumer debt free. That's a huge relief. And, our mortgage with taxes and insurance is low enough that we're able to save some money each month. I just want to be out of student loan debt soon. Hopefully, this next year leads to changes on that front.
Jerry
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