There are many reasons for wanting to have a home of your own like a place to raise your family, share with friends and feel safe and secure. While investment opportunities rank high for most people based on the fact that homeowners’ net worth is over forty times higher than that of renters, so do the tax benefits that reduce tax liability.
Taxpayers who have owned and used a home for at least two out of the last five years, can exclude a maximum of $250,000 of gain as a single taxpayer and up to $500,000 of gain for married taxpayers filing jointly.
If the gain on a principal residence exceeds the allowed exclusion, the balance is taxed at the lower long-term capital gains rate rather than the marginal tax rate of the homeowner.
Homeowners can deduct the interest paid on up to $1,000,000 of acquisition debt used to buy, build or improve their first or second home. They may also deduct the interest on up to $100,000 over acquisition debt that is a recorded lien on their first or second home.
IRS will allow taxpayers to decide each year whether to take the higher of the itemized deductions or the standard deduction.
Points paid on new loans for home purchases are considered interest and can be deducted in the year paid. On the other hand, points paid for refinancing a home must be amortized over the life of the mortgage.
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"Kathy was awesome as our realtor. I have dealt with many realtors, but none as advanced and hands on with the showings. During the showings she had pointed out the flaws with the homes for us to make an educated decision. She had guided us on the different areas that would best fit our needs. Most realtors are all about the sale, but my experience with her was the exception. She went the extra mile to make sure the home you were looking for met your needs and did not push you into a home that might not be right for you.The response time was incredible, she guaranteed a phone call or answer to any question same day. Her customer service was incredible and would recommend to all of our friends and family. I have dealt with many realtors in my profession but none as as caring, knowledgeable, or efficient as her. Kathy's referrals for the inspector and mortgage process was outstanding. I would not hesitate to look forward to anyone else going forward. Best Regards, Jim Glowniak "