A photo illustration of the word mortgage with the shadow of a house key.
Question: I owe on $5500 left on my mortgage and could easily pay off the whole thing right now. However, I wondered what the tax consequences would be of paying off the mortgage now in 2011 or paying as it comes due, in Dec., Jan. and Feb?
Are there penalties, or is it such a small amount I might as well pay it? I don't understand the capital gains part of the taxes: is it better to pay off a house in Dec for the 2011 tax year, or in 2012 for that tax year? I know people who get married or have babies with year end tax implications in mind. Elizabeth, Indianapolis, IN