[net.taxes] "Principal Residence" and Tax Reform

das@ucla-cs.UUCP (06/11/85)

Is anyone familiar enough with the Administration's tax reform proposal to
find the flaw in the following trick (or did they miss something)?

Situation:  You've paid much of the mortgage on your house, and you'd like
  to buy a second, but under the reform plan, you can't deduct the interest.
Solution (courtesy of a friend):  Pay for the second home by refinancing your
  principal residence, and continue deducting the interest you pay.