Ten
Personal Residence Tax Tips
1.
A tax-free gain of up to $250,000 (single) or $500,000 (married
filing jointly) can be made on the sale of a primary residence.
2.
To qualify for the tax-free gain the owner of the property must
live in the property for two out of the last five years.
3.
Where the "two out of five" criteria has not been met,
a modified exclusion may still be taken under certain circumstances.
4.
The number of times a taxpayer can take advantage of this tax
break is unlimited.
5.
A first-time homebuyer can use up to $10,000 from a Roth or regular
IRA without paying the early withdrawal penalty.
6.
Interest on a home mortgage loan of up to $1,000,000 and interest
on a home equity loan of up to $100,000 is tax deductible.
7.
Interest expense on a loan taken out for the construction of a
new home can be deducted for the first 24 months of construction.
8.
Mortgage interest can be deducted on a second residence in addition
to the taxpayer's primary residence.
9.
Recreational vehicles and boats can be considered a residence
(or second residence) as long as they have cooking, toilet, and
sleeping facilities.
10.
Property tax is a deductible expense for any real estate.
(This information is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, consult with your professional advisor.)
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