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After-Tax Cost of Debt – How to Calculate it For Your Business

Debt RR

It’s important to understand how debt impacts a company’s bottom line so businesses can optimize their financial strategy. Calculating the after-tax cost of debt is one way business owners can determine how much value their debt provides. Debt Financing. It’s the most conservative debt option for both parties.

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How to Invest in Real Estate with a Self-Directed IRA: Is It the Best Option?

Credit Corp

However, it will be a non-recourse loan, which means that the bank can foreclose on the property and take it if the IRA ever defaults on its payments. Also, the IRS will tax the amount the bank is financing as an unrelated business taxable income. This tax is called Unrelated Debt-Financed Income Tax (UDFI).