Whenever you're at a point where you begin itemizing deductions, it might be best to have your tax returns prepared by a CPA. IRS rules and regulations can quickly become confusing.
Knoxville, TN (PRWEB) March 29, 2013
The Holloway Group, the leading Knoxville real estate team at Gables & Gates, REALTORS has posted a new article to their website titled "Top 7 Most Common Real Estate Tax Deductions."
Troy Stavros, Broker and Partner with the Holloway Group stated, "It's that time of year. Tax time. While it's important to discuss all your options with your tax consultant, there are certain deductions into which owners of Knoxville real estate should look."
Below are the Top 7 Most Common Real Estate Tax Deductions:
1) Mortgage Interest Deduction: The mortgage interest deduction allows taxpayers who own homes to reduce taxable income by the amount of interest paid on the loan which is secured by a principal residence.
2) Home Improvement Loan Interest Deduction: This deduction will allow taxpayers to write off the interest on home equity loans that has been used for "capital improvements" on Knoxville homes.
3) Private Mortgage Insurance (PMI) Deduction: If a homeowner paid less than 20% down when purchasing the home then PMI is most likely being paid. This can be a deduction, but certain stipulations apply.
4) Mortgage Points or Origination Fees Deduction: Points or Origination fees are paid when a new loan or refinance of a home takes place. These points and fees can be tax deductible.
5) Capital Gains Home Sale Exemption: If there is a profit from the sale of the home, a homeowner may qualify to exclude up to $250,000 of that gain from income, double that if married and filing jointly. Ownership and use of the home as a principal residence is required for 2 of the last 5 years.
6) Deduction For Cost Of Selling A Home: (For use when the Capital Gains Exemption doesn't come into play or if the gain exceeds the limits) Real estate marketing fees, title insurance, legal fees, administrative costs and inspection fees are all considered selling costs. Selling costs can also include items otherwise considered repairs—painting, wallpapering, planting flowers, maintenance etc, if completed within 90 days of the sale and if completed to make the home easier to sell.
7) Property Tax Deduction: The property taxes paid to a local, state, or foreign governments are tax deductible. They must be charged uniformly against all property in the jurisdiction and must be based on the assessed value.
Stavros concluded, "Whenever you're at a point where you begin itemizing deductions, it might be best to have your tax returns prepared by a CPA. IRS rules and regulations can quickly become confusing."
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