Real Estate Tax Deductions
10 Often Overlooked Real Estate Tax Deductions
- Home acquisition mortgage loan fees: If you bought your primary or secondary home in 2009 you probably obtained a mortgage to finance the purchase. That mortgage is called an “acquisition mortgage” because it enabled a purchase of the residence. If you paid a loan fee to obtain that acquisition mortgage, usually called “points”, that loan fee qualifies as an itemized interest deduction. Each point paid equals 1 percent of the amount borrowed.
- Home Improvement loan fees: If you paid a loan fee to obtain a home improvement loan, that loan fee is fully deductible in the tax year it was paid.
- Loan fees paid to refinance a home loan or borrow against other real estate: If you refinanced your existing home loan in 2009, or borrowed against other real estate, such as an apartment building, any loan fee you paid must be deducted over the life of the mortgage; i.e., if you paid a $1,000 loan fee to refinance with a new 33-year home mortgage, you can deduct $33.33 for each of the next 30 years.
- When refinancing, deduct any undeducted loan fees: Thanks to low mortgage interest rates, many home owners with equity in their homes refinanced in 2009. These home owners should remember to deduct on the 2009 income tax returns any undeducted loan fees from prior mortgage refinance.
- If you bought or sold property in 2009, remember to deduct prorated real estate taxes: A major tax deduction many real estate buyers and sellers overlook is the prorated property tax they paid at the close of escrow. Even if the other party remitted the payment to the tax collector, but your were charged a prorated portion of the tax bill, be sure to deduct your share on your 2009 return. Read the rest of this entry »
