Borrowing Money To Avoid Paying Taxes is Stupid!

The Ramsey Show Highlights

Ramsey Network

Self-improvement, Education, Investing, Business

4.6 • 682 Ratings

🗓️ 1 September 2022

⏱️ 7 minutes

🔗️ Recording | iTunes | RSS

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Summary

The Ramsey Call of the Day is a quick, daily dose of advice on life and money in under ten minutes. Hear from experts like Dave Ramsey, Ken Coleman, Rachel Cruze, Dr. John Delony, and George Kamel. Part of the Ramsey Network. Delivered to you five days a week. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the Ramsey Call of the Day, part of the Ramsey Network.
0:11.1	BJ's with us in Chesapeake, Virginia.
0:13.1	Hi, BJ. How are you?
0:14.8	Hi, Dave. I'm doing good. I'm over here cleaning up our empty house, so, but I'm good.
0:20.4	Sounds like a side hustle to me.
0:22.7	It is, it is. I love it.
0:25.2	Good, good money. How can we help?
0:27.6	Well, my question was, I do have these rentals, and I have to pay R.S.
0:34.7	Somewhere 15,000, 30,000 every year. So my question is, should I take equity out,
0:42.7	just so some of them I paid for. So I'm concerned about taking equity out just to try to have
0:48.7	other deductions or should I just continue to pay RRS? I don't know.
0:59.7	Okay. There are no tax deductions that make mathematical sense.
1:06.1	Because if you give the government, I mean, if you give the bank $10,000 and it is a tax deduction because it was interest on a loan, that means you get to deduct $10,000 from your income. So you do not have to pay
1:15.4	taxes on that $10,000. It does not save you $10,000 in taxes. It saves you having to pay taxes
1:24.3	on $10,000 of your income. And so if you're in a 25% tax bracket, it saves you $2,500.
1:30.5	So you gave the bank $10,000 to keep from sending the IRS $2,500.
1:34.8	That's called stupid.
1:38.6	Okay, we don't want to do that.
1:40.1	Very well.
1:40.7	No, we don't want it to do it.
1:41.7	We're not trading dollars for quarters and look at that and call that sophisticated financial planning, okay?
1:46.1	People do that crap all the time, though. And some CPAs are so stupid they recommend you do that. But you don't want to do it, okay?
	...

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