How do I enter a line of credit loan?
Submitted by Don46 on Mon, 01/02/2017 - 07:35
I have pledge asset loan through my broker. It has no required monthly payments. I'm planning to pay it off through a lump sum payment followed by monthly amortized payments.
I want to know: where and how do I enter this loan?
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dan royer
Mon, 01/02/2017 - 09:45
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Special Expenditures/receipts
Special Expenditures/receipts is the way to go. When you draw on the line of credit enter a non-taxable receipt. When you make a payment, enter two expenditures, one deductible (interest) and one not (principal).
I'm not familiar with how a pledge loan works, but this is a suggestion.
If you draw on 50K in 2017 but paid it back over 5 years, you'd have those expenses--lump sum or interest--to indicate over the next five years.
See also this thread.
Don46
Mon, 01/02/2017 - 11:26
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A pledged asset loan is
A pledged asset loan is something between a Home Equity Line of Credit and a margin loan, that is you borrow against collateral in a brokerage account but not to buy stocks, so you promise. The interest charges are lower than either a HELOC or Margin loan. I borrowed for a home improvement on a second (now first) home. OK, so I enter a special expenditure, non-taxable, and then special receipt, also non-taxable. That seems to work. Many thanks for your excellent advice, as always.
--Don