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Taxes
First
Time Home Buyers
One of the
things you frequently hear is that owning a home helps with your
income taxes. That is usually true. The interest on
your mortgage, property taxes, and many other expenses are tax
deductible. You will need to consult with a tax
advisor to learn the particulars of your individual situation.
Example:
A young couple in a 28% tax bracket who already itemizes,
purchases a $180,000 home with a fixed 6% interest rate will
save more than $250.00 per month on their income tax.
Move-Up
Buyers
Most
homeowners can sell their home every two years and pocket up to
$250,000 (for single tax filers) or $500,000 (married filing
jointly) in profit with no capital gains tax.
Scale-Down
Buyers
Homeowners
may scale down their housing without penalty, no longer do you
have to purchase a home of equal or greater value.
Home
Equity Loans
Interest is
fully deductible on home equity loans, including a second
mortgage or equity credit line, up to $100,000, regardless
of how the proceeds are used.
Vacation
Homes
Mortgage
interest on a second home is also deductible, there are separate
tax rules depending on the owner's personal use days. A
residence is a vacation home if it was used personally more than
14 days or 10% of the days it was rented (if rented more than
140 days).
Before
making decisions regarding selling or purchasing real estate and
before filing your income taxes, you should consult with a
professional tax advisor.
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