Caveat on our “good debt, no debt” post

 

We add an important caveat to our post of 6/21/2020 titled

To borrow or not to borrow; good debt, no debt.

Point 3 states that the interest on the debt should be tax-deductible. One of our subscribers rightly pointed out that in Canada, interest paid on such debt is not tax-deductible in tax-advantaged accounts. (It is, outside such accounts.)

Tax regulations vary among jurisdictions and at different times. For example, interest paid on a home mortgage is tax-deductible in the US but not in Canada. The tax codes in both countries add up to thousands of pages — more than the longest novel you ever saw. Accountants usually claim expertise only in their own jurisdictions.

Nevertheless, your accountant will be able to provide guidance on this point as well as other matters of taxation.

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Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me

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