Real Estate Property
Basis of Property - Gains and Losses
When you purchase property, the basis is usually its cost. Your cost also includes amounts you pay for sales tax paid on the purchase, commissions, and freight charges. Keep accurate records of all items that affect the basis of the property. This will help you to determine if you have a gain or loss when the item is sold.
First Time Homebuyers - Tax Credit
If you qualified for a First-Time Homebuyer credit in 2008, you must repay 1/15th of the credit each year beginning with 2010 and ending 2025.
Legal Fees for Unlawful Discrimination
You may be entitled to an adjustment to income for any attorney fees and court costs for settlements involving a claim of unlawful discrimination, a claim against the U.S. government, or a claim made under section.
Itemized Deductions - Mortgage Insurance Premium Deduction
Mortgage insurance premiums will be allowed as deductible interest on Schedule A, Itemized Deductions. Premiums for mortgage insurance polices started before January 1, 2017, for less than $1 million of acquisition indebtedness are deductible on Schedule A as mortgage interest. This deduction begins to phase-out for taxpayers with adjusted gross income exceeding $100,000.
Past Tax Returns - Getting Copies
If you are buying a home, your mortgage banker may ask for copies of several prior years' tax returns. If you cannot locate them, contact your local Jackson Hewitt office to request free copies of returns prepared by Jackson Hewitt. Otherwise, you can go online to IRS.gov and request a transcript of your return for free. If the financial institution requires a copy of the return, file Form 4506, Request for Copy of Tax Return, with the IRS. For a fee, the IRS will mail you copies of your past returns. This can take up to 60 calendar days.
Real Estate - Closing Papers
Once you close on your new home, keep your closing papers, including the Form HUD-1, in a safe place. When it is time for tax preparation, use Form HUD-1 to help determine the points and other closing costs you can deduct on your tax return.
Real Estate - Home Purchasers
Your home purchase can be a wonderful tax advantage. You may be able to benefit from itemizing your deductions. If itemizing, you can deduct payments such as mortgage interest, real estate taxes, and most points paid by you or the seller in the year of purchase. The earlier in the year you purchase your home, the more months of mortgage interest you will have by tax time.