What to use for security to borrow $100,000 - wants the

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QUESTION:
I need to get a loan for $100,000 to cover a debt.
As colateral I could use the home or I could use about $120,000 in mutual fund investments. I am in an upper tax bracket and have a steady income.
Which is the best overall money saving way to take the loan?
If I had to sell and buy back the mutual funds I would trigger a large
capital gain and would have to wait 3 months to get them back.
Can a tax deductable loan be made to keep an investment you already have or do you have to actually buy something with the loan? Can a loan against an investment somehow be considered tax deductable?  How does one arrange this??
RXXXXXXXXXXXXX
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david ingram replies:
For mortgage interest as a deduction, go to www.centa.com, click on [newsletters], click on [2001], click on November 2001 and read the eleven pages on making mortgage interest deductible.
Your best method is to sell the mutual funds.  If you buy them back (with borrowed money) within thirty days, there is no capital gain because trades of the same thing are not considered to have happened unless you are out for over thirty days.  That law is designed to stop artificial losses but it works both ways.  
The really good method would be to borrow the money on your house to buy an equivalent amount of funds and then sell the original funds a couple of days later and take the money to repay the first debt.
Just make sure the paper trail works. The Siguardson case and the Bronfamna case both speak to this.
Glad to help on an individual basis if you should chose to use our services formally.
david ingram
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 
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Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
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