Tax Benefits of Home Ownership

Sitting on the fence about buying a home?

Consider these tax benefits from Leonard Wiener of The Boston Globe:

Tax Benefits of Owning a Home

Before a home owner curses the troubled housing market, he or she should take solace in the U.S. tax code, which makes buying a home a good deal for almost everyone.

Here’s why:

• Mortgage interest deductions, including in some cases mortgage insurance premiums, reduce home owners’ tax liability by reducing income. The deduction includes interest paid on both a first and a second home.

• Interest on home equity loans is also deductible — whether the borrower uses the money to remodel the kitchen or to take a vacation to Disney World.

• Profits from selling a house are potentially a huge windfall. When a home owner sells a primary residence, any profit on the sale of the property is tax free up to $250,000 for single home owners and $500,000 for married home owners filing. Any profit above that is nearly always a long-term capital gain taxed at 15 percent — less if the seller’s tax rate is less than 20 percent.

• Home owners can itemize. That opens up opportunities to deduct a host of other items that wouldn’t be deductible if the taxpayer took the standard deduction.

Daily Real Estate News March 7, 2008

Source: The Boston Globe, Leonard Wiener (03/02/08)

Email Jeff or call him directly at 239-823-1783 with any questions or to discuss how to make ownership work for you!

Best of Luck, - Jeff