With these non-recourse interest tax losses baked in, investors were guaranteed to win after tax.
Optech agreed to loan him 90% of the value of the FRNs on a non-recourse basis.
The only loophole was deducting interest on non-recourse debt, and that should remain limited in Section 469.
The balance of a non-recourse mortgage is deemed to be proceeds in the sale of a property.
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As such, forgiveness of a non-recourse mortgage resulting from a foreclosure does not result in cancellation of debt income.
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In a European version, cheap, non-recourse loans would encourage investors to buy Italian or Spanish bonds and bring down yields.
Just tweak Section 469 to limit its application to non-recourse debt only.
Congress should not kick-the-can down the road on Fannie and Freddie and it should also address home buyers walking away from responsibilities on non-recourse loans.
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Going into 1986, there were tax shelter abuses, mostly from the use of non-recourse debt, and investors writing off much more than their cost basis.
An alternative, quietly touted by some North American officials, is to tempt investors into buying bonds by giving them access to non-recourse loans from the ECB.
Recently, a premier Islamic finance scholar, Mohammed Taqi Usmani, declared some aspects of sukuk to be un-Islamic, specifically the buyback at cost and the interest-free non-recourse loans.
The classic example of a non-recourse loan is a simple mortgage (if you sign a personal guarantee in addition to the mortgage, that changes the nature of the loan).
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Repair Section 469 by applying its limitations to non-recourse interest losses only and exempt economic losses to cost basis, and then watch the real estate market turn around fast.
You would have also been clued in that he borrows all the money for these investments via non-recourse financing, meaning no personal liability, and only hypothecating the wells as collateral.
Most of the French and German capital deficit should be remediable through selling shares to investors or selling non-core assets, without recourse to taxpayers.
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