Tax advantages of real estate

 

 

Owning a home is one of the best tax shelters one could have. Not only are the mortgage interest and real estate taxes a tax deduction, but did you also know that…

 

Tax simplification has made selling a home breeze. Generally speaking, gains of up to $500,000 for joint filers and $250,000 for single filers are tax-free and need not be reported. This has eliminated the need to keep detailed records of the cost of the home and improvements for most taxpayers. If you have rented your home or have occupied it for less than two years, tax simplification may not apply to you, and you should consult your tax advisor.

 

Special deductions may apply in the year of a home purchase. Origination fees, real estate taxes and mortgage interest contained on your closing statement may be deductible. Have your closing statement available when consulting with your tax advisor.

 

Recent changes in tax law have made taking a home office deduction easier. Consult your tax advisor about the recent legislation and determine if this deduction can now apply to your home office.

 

Interest on home equity lines of credit and second mortgage also are usually deductible.

 

And a related point, moving expenses involved in relocation to your new home may also qualify for additional deductions. Be sure to cover this topic with your tax advisor.