When moving make sure you are not missing any tax deductions or breaks you qualify for. Here are a few real estate related home tax breaks from Trulia that are often missed, overlooked and underused that could save you money when filing your taxes this year.
State and Local Home Tax Breaks for Green Home Improvements. Many home energy efficiency improvements are eligible for state, county and/or city tax credits or tax breaks. If you installed dual-paned windows, insulation, low-flowing plumbing appliances, tankless water heaters or solar panels, find your receipts and talk with your accountant or visit your state, county and city government websites to research tax advantages you may be eligible for.
Mortgage Interest Tax Break. The mortgage interest tax deduction is a major motivation behind many home buyer’s design to own a home. Seventy-nine percent of people said the mortgage interest and property tax deductions were extremely important to their decision to buy a home. You are able to write-off interest on up to $1 million of mortgage debt shifting the affordability equation and makes home buying more financially compelling than renting.
CODI Income Tax Exemptions. Normally, defaulted mortgage debt that is forgiven through a foreclosure, short sale, deed in lieu of foreclosure or settlement via partial payment is actually charged to a taxpayer as income. It’s called Cancellation of Debt Income, or CODI. Under the 2007 Mortgage Debt Forgiveness Relief Act, the IRS has temporarily exempted CODI from incurring income tax liability to avoid penalizing home owners for these sorts of settlements and resolutions to upside-down home mortgages. The act expired on December 31, 2013. If you were one of the homeowners who was able to close a short sale or settle a defaulted home loan in 2013, there is a good chance that you are eligible for a home tax break advantage of the CODI tax break when you file your 2013 return.
Become eligible for mortgage interest deductions, property tax deductions and other real estate tax breaks by purchasing a home or homesite in one of SouthStar Communities' master-planned communities and lower what your household owes on your next tax return.