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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: WallStBum who wrote (1499)	11/18/1998 1:50:00 PM
From: Colin Cody	Read Replies (1) \| Respond to of 5810

WSB, There was a ruling on that in the 1980s. But I don't remember all the details. Used to be you could prepay a year of installment (rule of 78s) debt, then there was a 6 month accrual rule that came out for businesses. For now, I believe that for a cash basis 1040 taxpayer the interest is accrued by the bank as "simple interest" therefor when prepaying the February payment, it would be all principal, and no interest. That's just off the top of my head. Remember for the 1040 taxpayer the bank sends out a 1098B form that will show the deductible interest, and the I.R.S. has been matching these for a couple years now. Colin