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Why the interest on a loan is a business expense and a tax deduction but the principal payments are neither?

William Cain

in Student Loans

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1 answer

Carlton Burgess on February 1, 2018

Due to the senior payment of your simply returning the borrowed money. WHEN YOU BORROWED THE MONEY, WAS NOT TAXABLE INCOME, the RETURN may NOT BE TAX DEDUCTIBLE.. (OR every year I would borrow an amount say equal to my taxable income from all sources, of someone or something (bank, brother, friend who I lend the same amount at the same time), and return it the next day...creating a deduction, and eliminate all my taxable income from other sources).

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