Can bank money on a loan with a personal home as collateral be spent on business

1. 57

   Judas Duckposted 12 years ago

   Can bank money on a loan with a personal home as collateral be spent on business items?
   
   Can you use bank loan money with a personal home as collateral for business expenses without getting  a 1099 C form?

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2. 78

   syzygyastroposted 12 years ago

   This depends on your credit rating overall and largely it you hold title to your home free and clear of liens and other collateralized debts and that can be used a collateral for loans on anything else. Some companies offer what is called a "reverse mortgage" where loans are taken out against the collateral of a home and then payed down as in a regular mortgage. The disadvantage of this is, that if your business goes into default and bankrupt, the bank will foreclose on the collateral, which if it is your free and clear home, will be seized by the bailiff along with any business assets.

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3. 68

   Pearldiverposted 12 years ago

   Not if the business is involved in Bank Robberies or Fraud - As pointed out on the UJ 8865-23 form used by the World Bank and others..

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4. 57

   Judas Duckposted 12 years ago

   The real answer is that, no, money from a personal home bank loan, cannot be used for other than home improvement.  This is subject to a research with an accountant and/the IRS rules.  It is possible if the money is used for your business or credit card payoff or small business loan payoff, the cash could be taxed as personal income with the 1099C form.  Legal uses will not be taxed until the end of 2012 when the law expires for the Home Exemption. This only occurs if the bank forecloses upon your personal home. You lose two ways, the loss of the home, your equity, and the IRS taxes you on personal income.

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