Assets placed in a custodial account are current, irrevocable gifts that belong to the child now and always. Assets placed in a custodial account are irrevocable gifts. 1 Unearned income includes interest, dividends, capital gains and other earnings from investments. Turn non-deductible debt into deductible debt. This is a good idea if you have outstanding credit card debt.
All interest paid on credit card debt is non-deductible.
Credit cards are a major financial drain because card vendors charge 10 to 20 percent interest, sometimes more. Naturally, it is better to pay credit card debt first rather than to invest at a lower yield. In some states, refinancing your home or condo may replace interest that is not tax deductible, with interest that is tax deductible. By refinancing, you borrow against equity in your home and use loan money to pay off credit cards. You also can use the borrowed money to pay other types of non deductible debt, such as personal, car and student loans.