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What else can I help you with?
Is repayment to the lender a tax issue?
Repayment to the lender is not typically considered a tax issue, as repaying a loan does not create taxable income or deductible expenses. However, the interest paid on certain types of loans, such as mortgage loans or student loans, may be tax-deductible, which can have tax implications. It's essential to keep track of both principal repayments and interest for accurate tax reporting. Always consult a tax professional for specific guidance regarding your situation.
You have a credit line and you are told that if you pay off the line over years it is not deductible If you pay it off in the year you use it it is deductible Is this right?
You cannot take any credit card debt or interest as a deductible on your taxes. Credit card debt is considered personal debt and does not qualify for tax breaks.
Why is the cost of debt normally lower than the cost of preferred stock?
Simple answer is interst is tax deductible.
Which security tends to have a greater after tax cost to the insurer debt or preferred stock?
preferred stock, because its divident payments are not tax deductible
Is donating blood tax deductible?
No, donating blood is not tax deductible.
Is Interest paid to debt collectors tax deductible?
no
Is the interest on corporate debt tax deductible?
Yes, in most cases.
Is repayment to the lender a tax issue?
Repayment to the lender is not typically considered a tax issue, as repaying a loan does not create taxable income or deductible expenses. However, the interest paid on certain types of loans, such as mortgage loans or student loans, may be tax-deductible, which can have tax implications. It's essential to keep track of both principal repayments and interest for accurate tax reporting. Always consult a tax professional for specific guidance regarding your situation.
Why is the after-tax cost of debt rather than the before-tax cost used to calculate the weighted average cost of capital?
Because interest expense is deductible. Because interest expense is deductible.
You have a credit line and you are told that if you pay off the line over years it is not deductible If you pay it off in the year you use it it is deductible Is this right?
You cannot take any credit card debt or interest as a deductible on your taxes. Credit card debt is considered personal debt and does not qualify for tax breaks.
Why is the cost of debt normally lower than the cost of preferred stock?
Simple answer is interst is tax deductible.
Will you get a tax refund if a collector is garnishing your check?
No. Garnishments are not deductible. They are just collection of some type of debt.
Why do you use an after tax figure for cost of debt but not for cost of equity?
Because interest is a tax-deductible expense for the firm, but dividends paid to shareholders are not.
Which security tends to have a greater after tax cost to the insurer debt or preferred stock?
preferred stock, because its divident payments are not tax deductible
Is donating blood tax deductible?
No, donating blood is not tax deductible.
What can you tell me about a Roth IRA tax deductible?
The benefit to a ROTH IRA tax deductible is that it is TAX DEDUCTIBLE. But that does not mean that there are no implications, so you still have to be thorough.
What are the effects of a corporate tax on the Weighted Average Cost of Capital of a business?
Only when interest paid on debt is allowed to be tax deductible that a corporate tax will help pull the WACC down. This is because we used an after-tax rate for cost of debt in calculating WACC. And by using the after-tax rate we are assumming that the government allows companies to use interest paid on debt reduce their income tax obligations, hence creating a tax-shield benefit for adding debt. From Peerawich
