whispery, I expect that you mean biweekly payments, that is, every two weeks, not every two months. If you make payments twice a month, you'll make 24 payments per year - but if you make them every two weeks, that makes 26 payments annually. Which accounts for a substantial portion of the reduction in time that it takes to retire the debt. Ofen the interest rate on mortgage is lower than on some other kinds of debt. If the difference in rate is not large and the other kind of interest is not deductible, perhaps the difference in deductibility will more than offset the difference in rate - I assume that your mortgage interest is deductible. If it is credit card debt that you are talking about, it might be preferable to pay down those debts instead, as the rates often run 15 - 18% for general cards, but especially if they are store-issued cards, for the annual rates often run 25 - 28%. In this area (Canada), some people borrow to invest in a retirement account (interest not deductible) in order to gain the tax deduction. That often is wise if one uses the tax refund to pay down the principal of the loan. Good wishes as you choose which path to follow. BTW - learning how money works is an interesting hobby. That pays well. joyful guy

sconti- There are many things you can factor in to minimize your capital gain on the house you sold if the profit exceeds the $500K exemption for a married couple. Start by taking a look at the IRS publication link below. Then, when you think you understand it, invest an hour with a CPA to make sure you've got everything you've entitled to. As far as the house you just bought, the deductions are going to be interest and property taxes. Here is a link that might be useful: Selling your home.

I'm not a professional, (just someone who enjoys figuring things out!) This was fun...sort of like trying to figure out a puzzle! And I'm sure someone out there probably has a much clearer answer..and please correct me if I'm going about my "computations" completely wrong! But the nearest I can figure.........(and keep in mind, I dont think you've given near enough information to even ballpark guess the answer)....but to give you a start...medical expenses are deductible after you meet that 7.50 % threshold. So, using the $100,000.00 income figure and just the $50,000.00 expense figure (that's some EXPENSIVE dental surgery!!) there would be no deduction for the first $7500.00 worth of expenses, but the balance of $42,500.00 would be deductible. So, it seems like that would take your taxable income down from the $100,000 to $57,500.00. Not including any other deductions or exemptions. Tax liability on $57,500.00 is $7819.00. Aside from that, it would be easier to guesstimate your tax LIABILITY as opposed to a refund, since you didn't say how much you paid in taxes throughout the year, nor your filing status, which I'm assuming to be married/joint. (As for taxes paid in.....I'm guesstimating maybe $17,000.00 based on $100,000.00 income using the tax computation worksheet. Of course, that doesn't take into account the number of exemptions you might have claimed on your w-4)

I think the suggestion to seek expert tax advice is sound, but I wanted to add something. On the strength of what you have reported here it would seem that you might be looking at nearly 109K of capital gains on the sale, less the cost of doing the subdivision which would include municipal fees, surveys, engineering studies, legal costs and anything connected with getting the land subdivided. However, I don't think it's as simple as that. When you paid 600K for the 85 acres it was a bulk purchase and it seems unlikely that all 85 acres were worth the same amount per acre. On a piece of property as large as that, there is bound to be land that is worth less per are (and therefore has a lower fair market value) because it was farther off the road, or had other development constraints. For that reason, the simple way of determining the basis value of each of the three subdivided acres: $600K divided by 85 (acres) times three, would not be accurate, and probably is misleadingly low. It may be that the land you subdivided was worth more per acre, even before it was subdivided. I suggest that you consider having the property examined by a qualified appraiser (not just a RE agent, unless he or she is also dual qualified as a certified appraiser) to help you determine what the true basis of the land you subdivided. To give a hypothetical example of what I mean: perhaps the three acres you sold were the only "view" lot, or had the only waterfront or access, or had some other very desirable feature of the overall tract. The remaining 82 may still have a decent spot for your new home but the rest may be overlooking the county dump and swamp land to boot. That's why each acre, or lot, needs to be looked at on its own merits, not just valued as if it was all equal. The subdivision almost certainly removed more than 3/85ths of the total value of the tract. A competent appraiser should be able to provide you with sufficient documentation for you to establish a correct basis, which will most likely increase the basis, and therefore reduce your capital gains tax liablity. But keep in mind what you reduce now will affect your basis when you eventually sell your house. However since presumably the new house will be your qualified residence, a large chunk of your potential capital gains will protected (assuming no change in tax code) at that point. HTH, Molly~