Tax Deduction

Don't go into debt and buy a commerical building just to get the tax deduction, Dave says.

QUESTION: Jill asks how you can save up cash to buy a commercial building without getting killed in taxes. Her accountant thinks they should go into debt to do it.

ANSWER: There are two words to say to your accountant. "You're fired". If you buy a building, you’ll still get killed in taxes. Even if you have deductions on everything, you’ll still get taxed. If you pay $10,000 a month in interest, that’s $120,000 a year. If you write that off, it will only save you about $30,000 in taxes. Don’t go into debt to get a tax deduction. It’s a great idea to save up and pay cash for a building.