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Personal Finance
We are dedicated to keeping clients abreast of the latest developments and tax-saving strategies. This section includes a library of hundreds of timely articles about business, taxes, finances, trends and the like. The articles are categorized by subject matter, which can be accessed from the links. Click on your topic of interest and find a wealth of information.
YOUR HOME & TAXES
Financial transactions involving your home have great tax and financial implications to taxpayers and their families and should be approached with a well-informed understanding of the process. This section includes a variety of self-help tools to assist clients with various aspects of the process. If additional assistance is needed, please call for an appointment or a telephone consultation.
- Going Green At Home Has Tax Benefits
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The “American Recovery and Reinvestment Act of 2009” (the 2009 Recovery Act) reinstated and expanded the residential energy improvement credit for 2009 and 2010 (this credit was last available in 2007) and extended and expanded the tax credit...
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- Tax Credit to Aid First-Time Homebuyers
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To stimulate home sales, Congress first established the first-time homebuyer credit in 2008, then modified it for 2009 (through November 30, 2009), and then extended it again through the middle of 2010 (2011 for certain service members) resulting in some...
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- A New Twist For Home Sales - Non-Qualified Use
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With the advent of the home sale gain exclusion back in the 1990s, taxpayers have been using that provision of the law in a popular strategy to exclude gain not just from their primary residence but also from rentals and second homes as well. They do...
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- Beware of Capital Gains From Previous House Sales
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Unless the taxpayer qualified for the over 55 exclusion, profits from home sales prior to May of 1997 were generally deferred into the replacement home. This, in effect, reduced the tax basis of the replacement home, so that when it is sold, the profit...
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- Divorce Doesn't Untie the Mortgage Knot
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Often, when a couple separates and divorces, one spouse continues to live in the family home. Frequently, the departing spouse will simply quitclaim the property to the spouse retaining the home. When filed, the quitclaim deed takes the departing spouse's...
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- Exclusion of Gain from a Taxpayer's Main Home
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Unless they meet the reduced exclusion qualifications, taxpayers must meet the ownership and use tests in order to qualify for exclusion of gain. This means that during the 5-year period ending on the date of the sale, taxpayers must have:
1) Owned the...
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- Using IRA Funds to Buy a Home
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CAUTION: The term “first-time homebuyer” is used both in the context of the penalty-free IRA withdrawal discussed in the article and the first-time homebuyer credit discussed in the article immediately following this one. Be careful in that...
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- Fun and Fortune for Fixer-Uppers
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Most individuals go shopping for their dream home rather than a fixer-upper when they are looking for a place to call home. However, if you are handy, willing and able to buy a home with the intention of fixing it up and reselling it, you have a unique...
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- Holding Title to Your Home
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If you're thinking of purchasing a home, have you considered how you intend to hold title to the property? Surprisingly, many home purchasers don't give much attention to the question even though the manner in which title is held can have far-reaching...
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- Home Equity Can Provide Funds for Children's Education
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Many parents of college age children would like to utilize the equity in their home to help pay for college expenses. When considering this course of action, there are two issues: (1) Should the first trust deed be refinanced or should a second trust...
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- Co-Owners Eligible for Home Sale Exclusion
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Most often, examples demonstrating exclusion of home sale gain is applied to single individuals or married couples. This gives the false impression that the $250,000 ($500,000 for married couples) exclusion applies to the home itself. Quite the contrary,...
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- Tax Break for Sales of Inherited Homes
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Heirs of property are often concerned about the taxes they will owe on any gain from that property's sale. After all, the property may have been purchased by a deceased relative years ago at low cost, but now has vastly appreciated in value. The usual...
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- Will the Interest from a Refinanced Mortgage be Deductible?
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If you are planning on refinancing your home, you might be concerned about whether the interest on the loan is deductible. Here's an overview of the current home mortgage interest deduction rules that should help answer your questions.
Interest on your...
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- Are you Keeping an Eye on Interest Rates?
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If you have a mortgage on your real estate property, you should be keeping an eye on interest rates. Rates have come down considerably over the last few months and are expected to take another dip in the near future. This may provide you with a favorable...
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- Home Sale Exclusion and Irrevocable Trusts
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Some taxpayers use revocable trusts as an alternative to having their property transferred by will. While there is no income or estate tax advantage to a revocable trust, there is a benefit in having the property pass to beneficiaries on the death of...
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- More than One Home
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If a taxpayer has more than one home, the taxpayer can only exclude gain from the sale of the taxpayer’s main home (principal residence), even if the other home meets the 2 out 5 ownership and use test.Main Home: The property that the taxpayer uses...
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- Mortgage Balance Has No Bearing on Sale Profit
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If you have ever refinanced real property such as a rental, vacant land, or even your home, you have essentially taken out a portion of the profits without actually selling the property. That means when you sell the property, your taxable gain may exceed...
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- Want to Get Rid of that Monthly PMI Payment?
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When a home purchaser's down payment is less than 20%, they must obtain Private Mortgage Insurance in order to get a loan. This is about one in every three new loans. Getting rid of the Private Mortgage Insurance will save you considerable money, but...
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- Reduced Exclusion
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If a taxpayer does not qualify for the full exclusion, they may still qualify to exclude a reduced amount if the taxpayer(s) did not meet the ownership and use tests, or the exclusion was disallowed because of the once every 2-year rule, but sold the...
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- Should You Refinance?
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There are a number of reasons to consider refinancing: lower payments, lower interest rates, eliminating PMI payments, home improvements, college funds, consolidating debt, purchasing a second home, or even financing a business venture.When considering...
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- Refinanced Mortgage Interest May Not All Be Deductible
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Over the past few years, mortgage interest rates have dropped significantly and homeowners in increasing numbers are refinancing their home mortgages and in the process, have extended the term of the loan and are frequently taking additional cash out...
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- Sale of a Home Used for Business
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Depreciation: The tax law assumes business assets will decline in value due to obsolescence and wear and tear. Therefore, taxpayers are allowed to take an annual deduction called depreciation, which represents the decline in value. If the asset is later...
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- Selling a Home with a Home Office can be a Tax Trap
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These days, more individuals are working from home offices and availing themselves of the "Home Office Deduction." For tax purposes, this deduction essentially divides your home into two separate pieces of property, your home and business property. Those...
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- Renting Part of Property
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If you rent part of your property, such as a room or a portion of the house, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had...
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- Selling Land That is Part of Your Home
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If a taxpayer sells the land on which their main home is located but not the home itself, the taxpayer generally cannot exclude the gain from the sale of the land with one exception. The exclusion would apply to the sale or exchange of vacant land that...
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- Selling Two Homes on Joint Return
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When a married couple sells a jointly-owned home that has been owned and used as their primary home for two of the prior five years, they can exclude up to $500,000 of gain from the sale of the home. They can only do this once every two years, unless...
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- Tips for Homebuyers
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If you're considering buying a home, here's a checklist of some of the things you should be on the lookout for:Check your credit rating – Before applying for a loan, pre-check your credit rating to make sure there are no surprises. The advantage...
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- Transform Nondeductible Interest to Deductible Interest
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The only interest that is still deductible as an itemized deduction is home mortgage interest and investment interest. If you are like so many others with large consumer debt such as credit cards, car payments etc., you are paying interest that is not...
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- Traps to Watch for When Helping Children Purchase a Home
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Frequently, parents (and possibly grandparents) help their children (grandchildren) with the purchase of a home. This can happen, for instance, if the children have income too low to qualify for a loan or have a credit record that precludes them from...
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- The Downside of Adding Your Child’s Name to the Deed
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Many parents, especially the older ones, assume it is wise to add a child’s name to their house deed in case something should happen to them. On the contrary, it is probably the worst thing that can be done. By doing so, the parent creates a host...
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- Home Tax Deductions
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Many taxpayers have misconceptions about what expenses of owning a home or a second home are deductible for tax purposes. To make the issue more complicated, the deductible items may be currently deductible or deductible at the time the property is sold....
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- Mortgage Insurance Premium Deduction
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The Mortgage Relief Act extends the rules treating qualified mortgage insurance premiums as deductible qualified residence interest for three years. Thus, they apply if the amounts: (1) are paid or accrued before Jan. 1, 2011; (2) aren't properly allocable...
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