San Diego Condos – Owning your San Diego Condo not only allows you to build wealth through appreciation, but it can also reduce the amount of income tax you pay every year.
Here are six tax benefits for San Diego Condo owners
1. Deductions for loan fees
Typically, you can deduct the “prepaid interest” you paid when you got
your mortgage loan. That includes points, loan origination fees, and
loan discount fees listed on your settlement statement, even if the
seller paid those fees for you. Each time you refinance your San Diego
condo, you can deduct prepaid interest fees.
However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you’re following the rules.
Search Downtown San Diego Condos
2. Property tax deductions
In the year you purchase your home, you’re entitled to deduct the real
estate taxes you paid at the closing table. You can continue to deduct
the property taxes you pay each year.
3. The mortgage interest deduction
Every year, you can deduct the amount of interest and late charges you
pay on your mortgage and home equity loans, though there are
limitations. If you’re required to purchase private mortgage insurance
(PMI) because you made a downpayment of less than 20% on your home, you
can also deduct those premiums as mortgage interest expenses.
4. Home office expenses
If you have a home office you use only for business, you may be eligible
to deduct the prorated costs of your mortgage, insurance, and other
expenses related to that space. The government scrutinizes home-office
deductions closely. Be sure you’re entitled to the deductions before
claiming them.
5. The costs of selling your San Diego Condo
In the year you sell your home, you can deduct the costs of selling it,
including real estate commissions, title insurance, legal fees,
advertising, administrative costs, and inspection fees. You can also
deduct decorating or repair costs you incur in the 90 days before you
sell your home.
6. The gain on your San Diego Condo
If you lived in your home for at least two of the previous five years
before you sell it, the government lets you to take up to $250,000 of
profit on the sale of your home tax free. That amount is doubled tp
$500,000 for married couples. This deduction isn’t available on rental
or second homes.
The government also allows you to subtract from your San Diego Condo sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn’t count.
