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Path: utzoo!watmath!clyde!burl!ulysses!allegra!oliveb!hplabs!hp-pcd!john
From: john@hp-pcd.UUCP (john)
Newsgroups: net.taxes
Subject: Re: Re: tax deduction of prepaid mortgag
Message-ID: <53400017@hp-pcd.UUCP>
Date: Sun, 25-Aug-85 14:27:00 EDT
Article-I.D.: hp-pcd.53400017
Posted: Sun Aug 25 14:27:00 1985
Date-Received: Wed, 28-Aug-85 20:51:45 EDT
References: <106@decwrl.UUCP>
Organization: Hewlett-Packard - Corvallis, OR
Lines: 20
Nf-ID: #R:decwrl:-10600:hp-pcd:53400017:000:855
Nf-From: hp-pcd!john    Aug 25 10:27:00 1985

<<<
<
<
<	"Interest paid in advance. If you pay interest in advance for a period
<	that goes beyond the end of the tax year, you must spread the interest
<	over the tax years to which it applies. You may deduct in each year
<	only the interest for that year."
<
< Together these would seem to imply that the interest payment for
< January of the following year must be allocated to the following year's
< deductions. The rationale being that the Congress does not wish individuals
< to manipulate their tax liability at random. 
<
It's not really interest paid in advance. The interest paid on 1 Jan is for
the outstandand principle from 1 Dec through 31 Dec so it is truely interest
for the previous year. If you make TWO payments on 31 Dec then one of them
can be deducted and the other has to wait until the next year.

John Eaton
!hplabs!hp-pcd!john