Benefits of Home Ownership
According to the National Association of Tax Professionals, first-time homebuyers can take as much as $10,000 from their IRA as a down payment - or up to $20,000 for couples with separate IRAs - without incurring a premature penalty. Homebuyers should also consider using money set aside for private school tuition as a down payment, mainly because tuition is not tax-deductible like mortgage interest. Instead, those funds can purchase a bigger house in a better neighborhood with top-performing public schools. However, the tax benefits of buying a residential property vary depending on the homeowner's tax bracket. In fact, the number of wealthy homeowners no longer allowed to deduct their property taxes will rise from 3 million this year to 35 million by the end of the decade due to the alternative minimum tax. Although they often do not take advantage of the full tax benefits of their property by itemizing, most homeowners can deduct mortgage interest for loans under $1 million; property taxes paid during the year, but not those placed in escrow for the future; any points paid to lower the mortgage interest rate; and interest on home equity loans or credit lines up to $100,000. Closing costs, refinancing fees, homeowners insurance, association dues, additional principal payments, depreciation, repairs, and local assessments are not tax-deductible, however. Finally, homeowners who sell after at least two years may be exempt from the capital gains tax, allowing them to exclude sale profits of as much as $250,000 for individuals and $500,000 for couples. Looking for help in buying or selling? RE/MAX Associates average more sales and experience than other agents in the industry. Stop by or Call RE/MAX Valley Real Estate 54 Boardman-Canfield Rd. Boardman, OH 4451, 330.629.9200, or visit our web: www.OurValleyHomes.com | 
