[wpcol_2third id=”” class=”” style=””]MARCH NEWS YOU CAN USE
Housing Stats ∙ Top Real Estate Deductions for 2014
HOUSTON HOME SALES START TO DECLINE FOR THE FIRST TIME IN SIX MONTHS
February marked the first time Houston has seen a decline in homes sales in the last six months. Much of the decline is being attributed to falling oil prices and related layoffs, limited housing inventory and rising home prices. Sales of single-family homes dropped 5.8 percent year-over-year in February, with a large decline in homes priced above $500,000, which, until now, had been one of the market’s strongest and steadiest segments. With the exception of home prices, which rose, indicators for the Houston real estate market entered negative territory in February, with single-family home sales volume, total property sales volume, and total dollar volume all down compared to February 2014. Houston’s housing inventory grew slightly in February to a 2.7-months supply versus the 2.6-months supply of a year earlier. That is still below the current national supply of 4.7 months of inventory.
According to the latest monthly report prepared by the Houston Association of REALTORS® (HAR):
>>>Read the entire release.
Leslie Lerner Properties was recently featured in Houston Business Journal.
>>>Read More
TOP REAL ESTATE DEDUCTIONS FOR 2014
As April 15th approaches, homeowners need to be aware of the incentives the U.S. tax code offers. If you itemize, make sure you maximize your financial investment by taking advantage of the following deductions. For more information, please talk to your CPA.
Mortgage Interest Deduction
Homeowners that itemize their deductions can deduct the interest paid on a mortgage with a balance of up to $1 million. If the home is more than $1 million, the IRS will limit the deductible interest.
Mortgage interest on a second home is also deductible. The additional property doesn’t have to strictly be a house. It could be a boat or RV, as long as it has cooking, sleeping and bathroom facilities. You can still take full advantage of the mortgage interest tax deduction even if you rent it out for part of the year, as long as at least 14 days are spent there or more than 10% of the number of days you rent it out (whichever is longer).
Mortgage Points/Origination Deduction
Homeowners who paid points on their home purchase or refinance can often deduct those points on their tax returns. Points, also called origination fees, are usually percentage-based fees a lender charges to originate a loan. A 1% fee on a $100,000 loan would be one point, or $1,000. On a home purchase loan, taxpayers can deduct the entirety of points paid in the same year. On a refinance loan, the points must be deducted as an amortization over the life of the loan. Many taxpayers forget about this amortized benefit over time, so it’s important to keep good records on the deduction of points on a refinance.
The same rule applies to home equity loans or lines of credit. When the loan money is used for work on the house securing the loan, the points are deductible in the year the loan is taken out.
Property Tax Deduction
While it may sound strange to have a tax-deductible tax, the overall effect is that you don’t pay income tax on money that was spent on property taxes. Homeowners should only deduct the amount of property tax actually paid to their local municipality for the year. This is not necessarily the amount you paid to your escrow account, and should not include any other city or county fees that might potentially be on the same bill as your property taxes.
Real Estate Selling Cost Deduction
If you sold your home for a profit in 2014, $250,000 in sales gain ($500,000 for married, filing jointly) is tax-free as long as the homeowner owned the property for two years and lived in it for two of the five years before the sale.
If the home was sold before meeting the ownership and residency requirements, tax on any profit will be owed. The IRS provides some tax relief if the sale is because of a change in the owner’s health, employment or unforeseen circumstances (death, divorce/legal separation, employment circumstances or multiple births from the same pregnancy). In these cases, the tax-free gain amount is prorated.
Home Improvements
Certain types of home improvement projects are tax-deductible. Home improvements made for medical reasons, for example, can be tax-deductible. If you are making home renovations to accommodate a chronically ill or disabled person, and the renovations do not add to the overall value of the home, the project costs are typically 100% tax deductible. Repairs and improvements made for aesthetic purposes are not tax-deductible.
Home Offices
Homeowners who work from their residence can typically deduct the expenses of maintaining a qualified home office. Allowable tax deductions for a home office include renovations to the room(s), telephone lines, and the cost of heat and electric. There are caveats to claiming home office tax deductions on your tax returns, so please speak to your CPA.
[/wpcol_2third][wpcol_1third_end id=”” class=”” style=””]All of the service, for less money!
LESLIE LERNER PROPERTIES WILL:
>>>SEE WHAT PEOPLE ARE SAYING ABOUT LESLIE LERNER PROPERTIES
If you think it is time to buy or sell a home, remember to call Leslie Lerner Properties at 713.489.9900. Leslie Lerner Properties is the Home of Flat Fee Listings and Rebated Commissions. A great amount of information can be found at www.LeslieLernerProperties.com. Leslie Lerner Properties offers all of the service for less money, when buying or selling a home.
Like Leslie Lerner Properties on Facebook!
[/wpcol_1third_end]