DEAR BOB: I am a real estate saleswoman who would appreciate your repeating the formula for completing the after-tax cost of burrowing mortgage money. My buyers are [WORD ILLEGIBLE]today's high cost of mortgages Sara T., Arlington.

DEAR SARA: To find a burrower's after-tax cost of borrowing, multiply the mortgage interest rate by the tax-payer's income tax bracket. Then subtract that amount from the interest rate on the loans.

For example, if the mortgage interest rate is 10 percent and the taxpayer is in a 25 percent income tax bracket (combined state and federal), multiplying these two percentages gives 2.5 percent. Subtracting 2.5 percent from 10 percent gives a 7.5 percent after-tax interest cost to the borrower. Where else can money be borrowed so cheaply for so many years?

DEAR BOB: I just failed the real estate license exam for the third time. I'm 56 and perhaps too old to pass the test. Which states don't require license exams? Hugo T., Rockville.

DEAR HUGO: All states required estates sales license exams. Keep trying. Take license preparation classes to learn what you need to know to be a knowledgeable real estate salesman. Real estate agents never stop learning, so you had better get used to going to school.

DEAR BOB: We are thinking of selling our house and buying one closer to our son. Since he helps take care of us, we want to put the title in his name. Would this cause tax problems? Harold B., Falls Church.

DEAR HAROLD: Yes. When you sell your principal residence and buy a more expensive replacement, within 18 months before or after the sale, you must defer the profit tax payment to Uncle Sam. However, to qualify, both homes must be in the same names on the title. If your replacement home is in your son's name, it won't qualify. See your tax advisor to avoid making a costly tax mistake.

DEAR BOB: Is it smart for a condominium owners' association to incorporate to limit liability of the directors and unit owners? Mollie A., Washington.

DEAR MOLLIE: Generally, yes.Each state has different condominium laws regarding the legal status of condominium owner associations. The 1978 Tax Reform Act regulates federal taxation of such associations.

In addition to the tax and legal status, there is the liability situation to [WORD ILLEGIBLE] . You condominium owners' association probably carries liability insurance. But such insurance may not protect against every possible risk. Therefore, many condo owner associations incorporate to limit legal liability. Consult your attorney for his or her recommendation.

DEAR BOB: I read that it is possible for income property owners to depreciate each part of their building, such as wiring, plumbing, and roof, separately to maximize their depreciation tax deductions. True? Scott A., Alexandria.

DEAR SCOTT: True. Component depreciation usually gives bigger depreciation deductions than the old composite method which depreciates the structures as a whole.

To use component depreciation on a used building, you'll probably need a professional appraisal to apportion the purchase price among the land, building, and then the building's components. The result of depreciating each component over its short useful like (but a long useful life for the building shell) is faster and larger depreciation deductions. See your tax advisor for full details on component depreciation on new and used buildings.

DEAR BOB: As I understand your explanation of mortgage loan fees, I can deduct a loan fee paid to get the mortgage to buy my personal residence. But if I pay a mortgage loan fee to buy another type of property, such as apartments, I must deduct the loan fee over the life of the mortgage. Right? Hap L., Annandale.


DEAR BOB: The seller of the home we're buying gave us a "quit claim deed." I recall your saying such deeds weren't a good idea. Why? Guy W., Kensington.

DEAR GUY: A quit-claim deed conveys whatever title the seller owns. It may be full fee-simple title. Or no title at all. Or a faulty title.

If the seller owns full fee-simple title, why won't he give you a grant or warrantly deed? See your attorney or title insurer to be sure you're really receiving marketable title.