Taxing Matters: 3 Common Home Tax Concerns

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Taxes are complicated and can be confusing even for the seasoned property owner. Understanding the ins and outs of some common property tax concerns can help save you money and put your mind at ease.

From incentives to deductions, taxes are complicated and can be confusing even for the seasoned property owner. Understanding the ins and outs of some common property tax concerns can help save you money and put your mind at ease. Below Matthew Rand, Managing Partner of Better Homes and Gardens Rand Realty discusses three common tax topics.

1. Natural Disaster Relief
“If your home is affected by a natural disaster, your damage costs will be deductible from both state and federal income taxes,” says Rand. Disasters include fires, floods, earthquakes, hurricanes and more. “Homeowners can deduct their losses by filing an amended return for the tax year before the event happened. This helps to minimize the wait for refund money that can be used to make repairs or pay for living expenses,” Rand explains.

2. Historic Rehabilitation
“If your home is a certified historic home, then you may be able to receive a break in your taxes,” says Rand. Many states offer tax incentives, reductions and abatement programs for owners of residential historic homes. These programs are described on the National Trust’s website, which also offers resources and tips for owners of historic homes. Visit the site at http://www.preservationnation.org.

3. Home Improvement Deductions
“Many sellers ask me if they can deduct the cost of improvements made to their homes from their taxes,” says Rand, who continues to note that the answer is not black and white. “Yes, you can deduct improvements, but only after the home has been sold. This is because improvements add to the basis of your home,” Rand explains. “Because your basis is subtracted from your selling price to figure out what your home sale gain is, these tax deductions can only be made after your home is sold and your basis is defined.”

It is also important to note that the IRS has specific qualifications for what counts as a taxable “improvement.” These are renovations that add to your home’s value and extend its “useful life.” Rand cites taxable improvement examples including an extra bathroom or an updating plumbing, heating or electrical system.

For more information on property taxes, please contact Better Homes and Gardens Rand Realty at media(at)randrealty(dot)com, 845-825-8037, or Better Homes and Gardens Rand Realty.

ABOUT BETTER HOMES AND GARDENS RAND REALTY - Better Homes and Gardens Real Estate - Rand Realty, founded in 1984, is the No. 1 real estate brokerage in the Greater Hudson Valley with 27 offices serving Westchester, Rockland, Orange, Putnam and Dutchess counties in New York and Passaic and Bergen counties in New Jersey. Rand has more than 800 sales associates, as well as a commercial real estate company (Rand Commercial Services), new york mortgage company (Rand Mortgage), title company (Hudson Abstract Services) and New York insurance agency (The Hudson Group Insurance Agency). Rand Realty is also on Facebook and Twitter.

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Brian Incanno
Rand Realty
845-825-8047
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