Nothing is certain in this world, well, except maybe ..... - Death and Taxes. But did you know that borrowing funds to finance your "Dream Home" can actually lower your income tax? Home mortgage interest is deductible on your taxable income provided that you itemize your deductions. It doesn't matter if you use the mortgage to finance your first or second home - you can still deduct the mortgage interest from your taxable income.
Real estate taxes that are imposed upon owners of real property, are deductible on your taxable income as well. It is computed as a percentage of the value of the property and must be paid annually.
You can also deduct the interest on up to $100,000 on your home equity loan or popularly known as second mortgage. Home equity loans are usually used for financing home improvements, medical bills, college tuition or car loan. In home equity loan, you are using your house as a collateral for the loan. Just take note that if you fail to make the payments, you could lose your house to foreclosure.
Here's the good part, you don't have to pay taxes at all from the profit of the sale of your house. If you're married, you can earn up to $500,000 and $250,000 for singles on the sale of that house - tax free!! But you can only do this when you lived in that property for 2 years as your principal residence. So, you cannot rent it out and then claim for tax exemption from the sale later on. You can purchase a house, and then sell it, pocket the profit without paying taxes. If you make some home improvements, the value of the house will increase thus, increasing your profit even more. Please contact me for a list of home improvements that will give you a positive return on your investment.
For more detailed information regarding taxes please consult your local tax professional or research online at www.irs.gov. If you are, or know someone who is, interested in taking advantage of the current market prior to the end of the year, please contact me today.
Next topic: Maintenance on your property
Real estate taxes that are imposed upon owners of real property, are deductible on your taxable income as well. It is computed as a percentage of the value of the property and must be paid annually.
You can also deduct the interest on up to $100,000 on your home equity loan or popularly known as second mortgage. Home equity loans are usually used for financing home improvements, medical bills, college tuition or car loan. In home equity loan, you are using your house as a collateral for the loan. Just take note that if you fail to make the payments, you could lose your house to foreclosure.
Here's the good part, you don't have to pay taxes at all from the profit of the sale of your house. If you're married, you can earn up to $500,000 and $250,000 for singles on the sale of that house - tax free!! But you can only do this when you lived in that property for 2 years as your principal residence. So, you cannot rent it out and then claim for tax exemption from the sale later on. You can purchase a house, and then sell it, pocket the profit without paying taxes. If you make some home improvements, the value of the house will increase thus, increasing your profit even more. Please contact me for a list of home improvements that will give you a positive return on your investment.
For more detailed information regarding taxes please consult your local tax professional or research online at www.irs.gov. If you are, or know someone who is, interested in taking advantage of the current market prior to the end of the year, please contact me today.
Next topic: Maintenance on your property
No comments:
Post a Comment