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Path: utzoo!watmath!clyde!burl!ulysses!mhuxl!houxm!vax135!cornell!uw-beaver!tektronix!hplabs!hp-pcd!john
From: john@hp-pcd.UUCP (john)
Newsgroups: net.invest
Subject: Re: Interesting IRA Idea
Message-ID: <33700002@hp-pcd.UUCP>
Date: Sat, 8-Sep-84 12:24:00 EDT
Article-I.D.: hp-pcd.33700002
Posted: Sat Sep  8 12:24:00 1984
Date-Received: Fri, 14-Sep-84 03:03:11 EDT
References: <1031@ucla-cs.UUCP>
Organization: Hewlett-Packard - Corvallis, OR
Lines: 17
Nf-ID: #R:ucla-cs:-103100:hp-pcd:33700002:000:566
Nf-From: hp-pcd!john    Sep  7 08:24:00 1984

<<<

   The IRS borrowing rule has to do with tax free securities in general.
If you borrow money to purchase something that provides tax free income
then you cannot deduct the interest. The reason is that if someone in
the 40% bracket could get a 16% loan then he is only paying 9.6% for it.
You can get tax free securities that pay 10% so you wind up collecting
.4% for shuffling around OPM (Other Peoples Money). Not bad for a 
investment of $0.

   Since IRA income is eventually taxed I think it would be ok to borrow
for one.


John Eaton

!hplabs!hp-pcd!john