Real Estate - Income Tax Issues
Buyers
should understand the tax laws that impact buying and owning a home.
- Home
mortgage interest and real estate taxes generally are deductible as a
federal itemized deduction, although some limitations may apply.
- The
deduction of "points" as interest may be limited.
- Buyers who are selling a
prior residence should understand the rules for
computing gain. One should maintain records on costs of home
improvements since
these costs may be added to the basis of the home and thereby reduce
the amount
of gain.