Owning a Home


Today TaxMama® hears from 4775wsk in the TaxQuips Forum, with a quick question. “What are the tax breaks of home ownership?”

                         

Dear WSK,

Laura, our Aumakua in Hawaii and Mike Reed our EA in California chime in with answers.

Laura lists the main benefits – You get to deduct your mortgage interest and property tax; also mortgage insurance if the home was purchased after a specific date.

Mike adds that on a new home you may deduct the points paid in connection with obtaining a new loan. For more information, see Pub 530.

Then there’s one other important benefit. You can sell the house after two years or more without paying taxes on the profits – up to $250,000 for an individual – double for a couple. For folks who don’t mind moving every few years, and fixing up a home – this is a terrific way to build a relatively tax-free lifestyle.

And if you’re still trying to decide whether owning or renting is better, there are some things to consider in a recent MarketWatch article.

And remember, you can find answers to all kinds of questions about owning a home and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

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