Did someone say tax write-off!

There are some significant tax benefits made available to homeowners – be SURE to talk to your accountant about such aspects as listed below:

1. Every year one will have the opportunity to write-off on their tax filing the mortgage interest, taxes, and possibly some items of closing costs.  Also, if one has moved more than 50 miles then there are certain moving expenses that may be tax deductible.  One will be able to utilize the 1040 Schedule A form (‘long’ form) vs. the 1040-A form (‘short’ form).  When utilizing the long form one can write-off other expenses  such as charitable deductions.  One should consult with an accountant about the best means to take maximum advantage of the tax benefits of owning a home.
2. Keep in mind that there are ways to utilize tax benefits to help pay for the house on a monthly basis.  See the blog .
3. If one decides to sell their home in the future it will be important to understand the ‘basis’ value of the home versus the value when sold.  [Keep the HUD-1 document and appraisal.] One can increase the basis by including the cost of capital improvements.  For this reason one will want to include receipts related to capital improvements in a binder held for home expenses.  [Note: capital improvements are items that – add value; extend the useful life of the home; changes the use of something; e.g. wood floors, granite counters, renovated kitchen, swimming pool, etc.]  Some things to keep in mind when considering the sale of the house [since 2013 laws]:

There are exclusions that apply based on certain criteria –

1. If the home is a principle residence.
2. If one has lived in the home for 2 years within the last 5 years.
3. There is a $250k/$500k max. profit exclusion from the sale of the home (single person vs. married couple, respectively).

NOTE: in the past there were certain rules about selling homes which still prevail in some people’s thinking – these are no longer valid or required:

1. Must carry over the profits from the house to purchase a home of equal or greater value
2. Must purchase the new home within a certain timeframe
3. One could qualify for greater benefits if 55 or older
4. There were limits on how many times the homeowner could claim this rollover benefit

PLEASE Call me if you decide to sell your home.  I would love the opportunity to help you market and sell the home.

NOTE – If one decides to rent/lease their home in the future keep in mind that many of the expenses can be written off (capital improvements and repairs – keep receipts); also, the home will be set on a depreciation schedule.  As such one needs to be sure to consult an accountant about the tax implications of renting/leasing a home and subsequent sale thereof – tax implications.