HOME MORTGAGE TAX LOOPHOLE?

HOME MORTGAGE MONEY FOR COLLEGE TAX LOOPHOLE ALERT:

As most people know by now, Tax Reform put the final nail in the coffin of using the equity in your home to finance a college education via tax deductible home mortgage interest........or did it?

For those of you who love your children enough there is still a way. Assuming you have plenty of equity in your existing principle residence, sell it and buy a new one using lots of qualifying home mortgage acquisition debt. For example, suppose you own your existing home free and clear and sell it for $800,000. You then purchase a new home for $900,000 by putting $200,000 down, and financing the remaining $700,000 of the purchase with tax deductible mortgage debt (assuming the debt otherwise qualifies as home mortgage acquisition indebtedness under IRC Section 163(h) ET AL.) That leaves you $600,000 available to finance your child's higher eductation, which even by today's standards should be enough to get him or her all the way through graduate school with room to spare. As for me , this is yet another reason why I have a German Shepard instead of children. Of course the downside is that the dog cannot use a fancy education to take care of you in your old age ......but it can at least eat you when you are dead.