Top Tax Breaks On Owning Property #7

June 10, 2007

There’s no place like home to find shelter.  Home ownership offers a score of tax deductions and credits designed to help offset the cost of housing and to keep the housing market fueled with new buyers.   Here’s a look at the Top Tax Breaks.

Selling Costs and Capital Improvements:  When you sell your home, you can reduce your taxable capital gain by the amount of your selling costs, which include real estate commissions, title insurance, legal fees, advertising and inspection fees.  Costs typically stemming from decorating or repairs, painting, painting, wallpapering, planting flowers, maintenance and the like are also selling costs if you complete them within 90 days of your sale and with the intention of making the home more saleable.

Selling costs are deducted from your gain.  Gain is your home’s selling price, minus deductible closing costs, minus selling costs, minus your tax basis in the property.  Your basis is the original purchase price, plus the cost of capital improvements, minus any depreciation.

*Everyone’s tax situation is different, visit the Internal Revenue Service’s site for more details or contact your CPA or tax preparer to verify that this applies to you.

Posted in All Things San Diego, Helpful Hints, Lending, Real Estate, Taxes, Things of Interest