Jeff’s Carlsbad Blog for First Time Home Buyers


5 Home-Ownership Tax Myths

Posted in Taxes by Jeff Dowler on October 12, 2006

There are a number of myths about homeownership and taxes. I want to briefly chat about them here. Keep in mind that I am NOT a tax expert, and cannot give you tax advice (FYI this information was taken from an article I found on Bankrate.com). Despite these myths, homeownership remains a significant fiancial benefit and is perhaps the best way to accumulate wealth. Some of these may not affect those of your buying for the first time, but they are worth keeping in mind for the future.

1. Mortgage interest wll reduce my tax bill – yep, true to majority of homeowners, but not all, if your deductions are not enough to exceed the standard.

2. All costs related to my home are deductible – many expenses are, but things llke Homeowner Association (HOA) fees adn property insurance are not deductible. Also private mortgage insurance (PMI), general maintenance and repair.

3. I must use money from teh sale of my residence to buy another hoouse – the rules have changed, so check wiht your tax adviser regarding this.

4. Putting a child on the home’s title is a smart tax move – using this strategy to avoid estate taxes can be a problem. And in order to get a tax break the child would need to live in the home as a primary residence for 2 of the 5 years either before or after the parent dies. There are tax complications, so again check with your tax adviser.

5. If I take a capital loss when I sell my home I can write it off – no, you can’t, sin

Advertisements

One Response to '5 Home-Ownership Tax Myths'

Subscribe to comments with RSS or TrackBack to '5 Home-Ownership Tax Myths'.


  1. […] (taxes, income, desire to enhance […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: