Unfortunately, I have to disagree with the advice being offered. Suggesting the client is “clearing” $400 a month is misleading. The client needs to understand his or her position on an after-tax basis which may very well be quite different. Furthermore, the “change in use” rules should be considered when it comes to Principal Residence. The latter can result in a capital gain in certain circumstances.

I would recommend using caution in advancing this strategy. You are well advised to have any client considering this strategy seek professional tax advice.

Carl

p.s. I like the site.

That’s good advice and a sign of a good realtor when you give advice like that. As you have shown, at the end of the day its the clients needs first!

Great post.

M