<p>“dstark, why doesn’t your rich friend apply for an equity line loan secured by his house? Then he would be able to deduct a part of the interest expense in the event he borrows money?”</p>
<p>Maybe rich is tongue in cheek.</p>
<p>I saw a friend at work and asked him how things are going with three kids in college. He’s paying $100K a year (one is on the five-year plan). He just sold some stock to pay for the fall semester. No big deal. If you’re rich, I’d expect you to have liquid assets at least that of the value of your house. This guy could always just sell the $10 million house, buy a $1 million house and have the “problem” of figuring out what to do with the other $9 million. Unless he’s leveraged and HELOC’d to the hilt.</p>