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From: brett@ucla-cs.UUCP
Newsgroups: net.invest
Subject: Interesting IRA Idea
Message-ID: <1031@ucla-cs.ARPA>
Date: Fri, 31-Aug-84 15:25:20 EDT
Article-I.D.: ucla-cs.1031
Posted: Fri Aug 31 15:25:20 1984
Date-Received: Mon, 3-Sep-84 09:36:28 EDT
Organization: UCLA CS Dept.
Lines: 29

I found the following question and answer particularly interesting.
Its from an IRA mailer.

Q: Does it make sense to borrow money to fund my IRA?

A: In many cases it does.  Of course, it depends on your particular
   situation.  But here's one example.

   If you're in a 40% tax bracket and contribute $2,000 to an IRA,
   you save $800 in current income taxes.

   If you borrow that $2,000 for a year at an interest rate of, say,
   15%, you'd pay $166 in interest if you paid back your loan in 12
   equal payments.  You can then deduct the $166 from your taxes.
   Given you 40% tax bracket, you'd recoup $66 of that interest
   expense as a tax deduction.  This means that your one-year loan
   would cost you only $100.  That's a small price to pay for
   a current tax savings of $800.

-- 
Brett Fleisch
University of California Los Angeles
3804 Boelter Hall
Los Angeles, CA 90024
Phone: 474-5317 

brett@ucla-cs.ARPA or
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