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From: spp@ucbvax.ARPA (Stephen P Pope)
Newsgroups: net.taxes
Subject: Re: tax deduction of prepaid mortgage interest
Message-ID: <10211@ucbvax.ARPA>
Date: Tue, 27-Aug-85 16:48:51 EDT
Article-I.D.: ucbvax.10211
Posted: Tue Aug 27 16:48:51 1985
Date-Received: Fri, 30-Aug-85 00:30:46 EDT
References: <106@decwrl.UUCP>
Organization: University of California at Berkeley
Lines: 14
Summary: One years prepaid interest deductible for principle residence


     Although in general prepaid interest is not deductible 
other then in the tax year in which it would of been due,
for cash-basis taxpayers there is an exception for your 
priciple residence, which allows prepayment of up to one year's 
initerest.  I don't have the reference off hand.  The usual
application is if you have a mortgage from an individual, and
figure you're in a higher tax bracket at the moment then you 
will be next year, he might agree to accept the interest 
prepayment.  
    Prepaying more than a year in advance is a "material distortion
of income".

steve pope (..ucbvax!spp ; spp@berkeley)