April 18th is Tax Day! And one of the best tax write-offs is a home. There are so many tax benefits to owning vs. renting, that we highly recommend everyone researches their options before making a decision either way.
Tax rules for real estate are constantly changing, therefore we suggest reading a useful publication (IRS Publication 530) called Tax Information for Homeowners that covers such topics as:
- How you treat items such as settlement and closing costs, real estate taxes, sales taxes, home mortgage interest, and repairs
- What you can and cannot deduct on your tax return
- The first-time homebuyer credit
- The tax credit you can claim if you received a mortgage credit certificate when you bought your home.
- Why you should keep track of adjustments to the basis of your home. (Your home’s basis generally is what it costs; adjustments include the cost of any improvements you make.)
- What records you should keep as proof of the basis and adjusted basis
- And other helpful information
Although we, as Real Estate Professionals, are knowledgeable about the tax laws, your best resource is always a tax accountant or attorney.