Consumption and Real Estate
Should I report the downpayment “out” refinancing of mortgages as income?
I’m doing my own taxes every year but this year I’ve a question. I refinanced my mortgage in the spring. If a significant amount of equity and decided to help the cash, “to” some of my stocks to pay outstanding debts (car, student loans, credit card balance) hold, and held several rescue ( if available, if necessary). I know the government is trying to take a piece of everything, but it’s my money. This is not a “wage” – that makes the difference?
It isn’t “your” money. You didn’t sell your house, or an interest in your house, to the lender. Instead, you borrowed additional money from the lender on the security of your house, most likely because of a combination of factors that resulted in increasing your equity in the house: first, an increase in the market value of the house, as shown by an updated appraisal, and second, a decrease in the outstanding debt secured by a mortgage on the house because you’ve been paying down the principal of the original loan. Those two factors, or others having the same effect, would result in an increase in the loan value of your house — that is, an increase in the amount a lender would be willing to lend on the strength of a mortgage on the house.
The bottom line is that the money you received in the refinancing is additional borrowed money that was lent to you on the security of the original mortgage on your house. Taxable income does not include borrowed money except in the rare case when the debt is forgiven by the lender.
If you still really believe that the money you received in the refinancing is your money, and not borrowed money, try not paying it back to the lender and see what happens.