Good Return but No Tax Break on Second

QUESTION: I have an opportunity to buy a second mortgage at a discount that will yield me a return on my money of about 22%. But I am wondering if there is any tax shelter in discounted mortgages for investors.

ANSWER: I regret to report your high yield is entirely taxable. There is no tax shelter, just high income, from investing in discounted mortgages.

Reading About Realty Investment

Q: Can you recommend a good book on real estate investments? I also would appreciate learning about a good correspondence course or book on property management.

A: An excellent book on real estate investing is William E. Tappan’s “Real Estate Exchange and Acquisition Techniques” (Prentice Hall, 1989, $19.95). An outstanding book on property management is “Landlording” by Leigh Robinson (Express Publishing Co., 1989, $19.95). As for a course in property management, most local community colleges offer such classes at minimal cost. Sorry, I am not aware of any property management correspondence courses.