E61 8 Tax Benefits for Buying and Owning a Home (Podcast)

E61 8 Tax Benefits for Buying and Owning a Home 956x538 blog

Summary

  1. Deduction for home mortgage interest
    • Mortgage must be less than $750,000
    • Includes HELOCs
  2. Deduction for property taxes
    • Must itemize, not standard deduction
    • All SALT capped up to $10,000
  3. Deduct “points”
    • “Points” are the fee you paid to get a lower interest rate
    • Deduction amortized over life of mortgage
  4. Deduction for PMI
    • PMI = private mortgage insurance
    • Usually required when your downpayment is less than 20%
  5. Capital gains tax exemption
    • Capital gains tax is ~20% of your profit (sale price – purchase price)
    • $250,000 gain ($500,000 for married couples) exempt from tax
    • 2-of-5 year residence rule
  6. Green deductions
    • Solar energy, both for electric and water heating
    • Deduct up to 30% of equipment cost
  7. Deductions for QoL for seniors
    • Examples: wheelchair ramps, bathroom grip bars
    • Check with IRS for qualified items
  8. Deductions for working from home
    • $5/sf up to 300 square feet. Max $1,500
    • Tread lightly: this is an audit magne

Relevant links: https://www.doughroller.net/taxes/tax-benefits-for-buying-and-owning-a-home/

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Available at Amazon.com

Questions answered in the book:

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