Each Payment on a Mortgage Note Payable Consists of Interest

question 185

True/False

Each payment on a mortgage note payable consists of interest on the original balance of the loan and a reduction of the loan principal.

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Definitions:

Net Income

The total earnings of an individual or business after all taxes and other deductions have been subtracted.

Section 1202

A section of the Internal Revenue Code that provides a tax benefit for small business stockholders by excluding part of the gain realized on the sale or exchange of qualified small business stock held for more than five years.

Qualified Small Business Stock

A special designation for shares in certain small businesses that can offer investors tax advantages under specific conditions.

Long Term Capital Gain

Profit earned from the sale of an asset held for more than a year, subjected to preferential tax rates.