Recourse debt is debt for which the borrower remains personally liable beyond the collateral in the event of default.
Recourse debt is debt for which the borrower remains personally liable beyond the collateral in the event of default.
It matters because liability exposure and some tax results differ from nonrecourse financing.
A borrower personally guaranteeing an investment property loan is usually taking on recourse debt.
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Recourse debt is debt for which the borrower remains personally liable beyond the collateral in the event of default.
Recourse debt is debt for which the borrower remains personally liable beyond the collateral in the event of default.
It matters because liability exposure and some tax results differ from nonrecourse financing.
A borrower personally guaranteeing an investment property loan is usually taking on recourse debt.
Ask a CPA when the term affects property tax planning, rental activity, depreciation, basis, or gain on a sale.
Recourse Debt means Recourse debt is debt for which the borrower remains personally liable beyond the collateral in the event of default. Nonrecourse Debt means Nonrecourse debt is debt secured primarily by collateral where the borrower generally is not personally liable beyond the pledged property, subject to the governing documents and law. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.
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