E61 8 Tax Benefits for Buying and Owning a Home

Summary Deduction for home mortgage interest Mortgage must be less than $750,000 Includes HELOCs Must itemize, not standard deduction All SALT capped up to $10,000 Deduction for property taxes “Points” are the fee you paid to get a lower interest rate Deduction amortized over life of mortgage Deduct “points” PMI = private mortgage insurance Usually required when your downpayment is less than 20% Deduction for PMI Capital gains tax is ~20% of your profit (sale price - purchase price) $250,000 gain ($500,000 for married couples) exempt from tax 2-of-5 year residence rule Capital gains tax exemption Solar energy, both for electric and water heating Deduct up to 30% of equipment cost Green deductions Examples: wheelchair ramps, bathroom grip bars Check with IRS for qualified items Deductions for QoL for seniors $5/sf up to 300 square feet. Max $1,500 Tread lightly: this is an audit magnet Deductions for working from home My book “How to Buy Your Perfect First Home” available on Amazon