Paying off your truck?

The gotcha is that the holding company would have to pay taxes on its profit which would end up being more than what you would save in taxes from the trucking company. People can do a lot to save on taxes until they get audited, then all bets are off.

 

Many loans are set up so you pay a penalty for paying off early. Like a 5-4-3-2-1 plan. In the first year any extra principle is penalized at 5%, 2d year at 4% so on and so forth. You got the loan for 5 % interest, you could pay it off early but the financing is going to cost you the same, may as well keep paying the payments and hang on to your cash.

 

Well I wouldn't get a loan, much less a loan like that. Do you understand how silly and ludicrous that type of loan is. "We don't want you to pay off your loan early unless you take these penalties." That's absurd.

With loans like that I'll buy with cash and stay debt free. And keep all my money and do smart things with it unlike these types of things. That has got to be the most foolish loan I've ever heard of.

 

Hold it ! If you're from Nepal don't go spending your own money so quick. I bet Obama would pay off your truck just because you are a foreigner.

 

Actually it is a very common loan used for commercial loans and normally comes with the best interest rates. Many people never even know they have that unless they specially ask if there are penalties for paying off early. Often with the high interest and high risk companies you don't see it.

 

If you buy a truck, you can't write off the price in the form of payments? If your doing 1000 a month in payments, you can deduct that right?

 

I still would not get it. How much interest does one have to pay for them to realize that they are being swindled into paying more than the price of the item? The "best" interest or "low" rate is still having millions pay thousands more than what the price is. That makes no sense when they are talking about "saving" themselves money . The best rate still overcharges them rather than if they paid with cash. Buying something that loses value and does that over the time of any loan is poor planning. It's not smart. Nothing would make it be smart. I'll stick to the asking price plus including dreaded taxes. Rather than asking price, taxes, then interest thrown on top and don't mention any penalty charges because one decides to pay off loan earlier. No thanks.

 

No, you only claim the deprecation on the purchase price, the loan payments are not deductible. The only way to deduct payments is on a lease, if it meets the IRS criteria. The IRS does not care how you acquire the asset, cash or borrowed money, they base your write off on the value it loses.

 

The original cost of the truck is deprecated up to 5 years or less. Whatever you and your accountant choose. The interest on the loan is deducted in the year it's paid....

so the entire cost of the truck is written off . Just different terms are used....

I'm not an accountant , and I didn't stay at a holiday inn.