My share of an inheritance from my mom will be $135,000. Her financial advisor says that if paid to me in a lump sum, about $50-55,000 will be taxable as ordinary income.
I took a 2nd mortgage last year on my house to buy a vacation home that needs some work in order to be usable for myself and as a seasonal rental. I owe $95,000 on the 6.5% loan; repairs and upgrades will run about $35,000. Getting this house in order is a top priority. I hope to retire next year, and planned to sell the main house, using the profit to pay off the vacation house loan and pay cash for a retirement place. I would continue to own two houses.
Question: What is the best strategy to use this inheritance? Take the tax hit and pay off the vacation house loan and repairs? Keep the loan, pay for the repairs, invest the rest, and pay off the loan next year with the sale of the main house? Other, better ideas?
2006-08-17
04:46:08
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4 answers
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asked by
dognhorsemom
7
in
Personal Finance