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Showing posts from June, 2019

Taxes and the Homeowner

Whether you're an owner now or expect to be one in the future, it is important to be familiar with the federal tax laws that affect homeownership.Since personal income tax was enacted in 1913 with the 16th amendment, homes have had preferential treatment.The mortgage interest deduction is based on up to $750,000 of acquisition debt used to buy, build or improve a principal residence.In addition to the interest, the property taxes are deductible, limited to the new $10,000 limit on the aggregate of state and local taxes (SALT).The taxpayer may also deduct interest and property taxes subject to limits on a second home.Homeowners can decide each year whether to take itemized personal deductions or the allowable standard deduction which was significantly increased under the Tax Cuts and Jobs Act of 2017.Single taxpayers may exclude up to $250,000 of capital gain on the sale of their home and up to $500,000 if married filing jointly.They must have owned and lived in the home for at lea…

Show Them You're Serious

June and July are the busiest home sale months of the year. When inventory is in short supply and you may be competing with other offers, it is important to show the seller you're serious. Make your offer look as good as possible because you may not get the chance to make or accept a counter-offer.Put yourself in the seller's shoes.Your home has just gone on the market.There is lots of activity and suddenly, there is more than one offer to purchase.The seller's first consideration may be to accept the highest offer but there are many other things to consider like closing dates, closing costs, possible repairs, contingencies and of course, the ability of the borrower to get a loan.Offer a fair price for the property in your initial purchase agreement.It shows sincerity and good faith that you're actually trying to purchase the home and not trying to take advantage of the seller.The old adage that you can always go up later may never happen if there are multiple offers o…

Don't Leave Home Without...

You've been planning this trip for some time and almost every detail has been considered...or has it?Have you thought about how to protect your home while you're out of town?What's going to make sure that everything you left is still there in you return?Nothing could ruin a trip more than coming back to find out your home has been burglarized or worse.It makes sense to spend a little time before you leave on making sure your home is as safe and sound as it can be.There are a host of devices to use across the Internet including camera door bells, video cameras, door locks, garage door openers, light and thermostat controls.You can monitor your home whenever you have an Internet connection.The question is whether you want the distraction from your trip.Consider these low-tech suggestions along with your other normal efforts:Tell your neighbors you'll be out of town and to be aware of any unusual activity.Notify your alarm companyDiscontinue your postal deliveryUse timers…

Temporarily Renting a Home

IRS has provisions for homeowners regarding the sale of a principal residence that allows for temporarily renting the home without losing the ability to exclude the gain if the home is sold under the correct conditions.The rules for the exclusion of gain on the sale of a principal residence are:Up to $250,000 of gain may be excluded for single taxpayers and up to $500,000 for married taxpayers filing jointly.Ownership and Use must have been a principal residence for two of the five years preceding the date of sale (closing date).This allows for a temporary rental for up to three years maximum.Either spouse may meet the ownership test.Both spouses must meet the use test.No exclusion has been used in the previous 24-month period.Let's pretend that a person had owned a home from more than two years.This person married and moved into their new spouse's home two years, six months ago.That person decided to sell the home and would have approximately $200,000 of gain in the sale.If t…