(773)0376-5031 contact@hajfinancial.com Tax Tips for Homes and Rental Property by Adfajuelhaj | Jan 21, 2020 | Money Most expenses incurred when buying a home such as broker’s commission, attorney’s fees, recordings fees, owner titles insurance and transfer taxes are not tax deductible but they are added to the cost basis of the home.Buying a Home Owning a home You may deduct i. Real estate taxes ii. Mortgage Interest iii. Mortgage Interest Credit iv. Casualty or theft loss, subject to 10% AGI limitations Selling a home The IRS allows up to $500,000 of gain from the sale of principal residence to be tax free if you are married filling jointly, $250,000 is nontaxable for single person. i. You must have owned and lived in the property for at least 2 years of the last 5 years. Having a business in your home Most of the time any expenses that are related to your business can be deducted. Each business is different but here are some ideas that may apply i. Franchise fee ii. Business Supplies iii. Advertising iv. Items you give away v. Phones bills vi. Home Office vii. Returned checks/bank fees viii. Postage ix. Computer When buying Rental Property Report all rental income, including advance rent received do not include the deposit Expenses paid by tenant should be included in the income and then deducted as rental expenses When Selling Rental Property The gain from the sale of a long term capital assets are subject to maximum rate of 15%. The rate for individuals in 10 to 15% income tax Most expenses incurred when buying a home such as broker’s commission, attorney’s fees, recordings fees, owner titles insurance and transfer taxes are not tax deductible but they are added to the cost basis of the home.Buying a Home Owning a home You may deduct i. Real estate taxes ii. Mortgage Interest iii. Mortgage Interest Credit iv. Casualty or theft loss, subject to 10% AGI limitations Selling a home The IRS allows up to $500,000 of gain from the sale of principal residence to be tax free if you are married filling jointly, $250,000 is nontaxable for single person. i. You must have owned and lived in the property for at least 2 years of the last 5 years. Having a business in your home Most of the time any expenses that are related to your business can be deducted. Each business is different but here are some ideas that may apply i. Franchise fee ii. Business Supplies iii. Advertising iv. Items you give away v. Phones bills vi. Home Office vii. Returned checks/bank fees viii. Postage ix. Computer When buying Rental Property Report all rental income, including advance rent received do not include the deposit Expenses paid by tenant should be included in the income and then deducted as rental expenses When Selling Rental Property The gain from the sale of a long term capital assets are subject to maximum rate of 15%. The rate for individuals in 10 to 15% income tax bracket is 5%. The tax will be eliminated for those in the 10 to 15% income tax bracket beginning in 2008. i. The max capital tax gain will return to 20% and 10%, respectively after 2010. b Or you can purchase another property and defer taxes for the future with a like-kind exchange property which must meet certain requirements. (You must follow Form 8824) Recent Posts What Receipts Should You Save? Tax Tips for Homes and Rental Property ADVANTAGES AND DISADVANTAGES OF OWNING A HOME INVESTING IN LAND SAVING TIPS Recent Comments Archives January 2020 September 2019 Categories Insurance Money Realty Meta Log in Entries feed Comments feed WordPress.org Power by SWATware LLC.