Being a homeowner allows you to qualify for deductions on your mortgage interest. Take advantage of this opportunity if you’ve purchased a house or pay interest on mobile homes, condos, or other places of residence.
Property Tax
Putting money into your home allows you to treat the purchase as a future investment. Having “imputed rent” can be omitted from your taxable income. In this situation, it allows the taxpayer to be both a landlord and renter with the responsibilities of each.
Mortgage Interest
Itemizing deductions may allow taxpayers to reduce taxed capital by deducting interest paid on their place of residence. This deduction is limited to the interest on debt acquired to purchase a residence. Homeowners may also deduct interest paid toward home equity regardless of borrowed funds.
Selling Your Residence
If the taxpayer has lived in a residence for over two out of the last five years, the property is considered their primary residence. And if they have not gained any capital gains on their home they may sell the house and exclude the profit from their taxable income. In normal situations, taxpayers would generally have to record and submit the profit made from selling their goods, but in this situation the homeowner is exempt.
Conclusion
Finding deductions to use toward your homeownership can seem overwhelming. Finding the right tax deduction that fits your type of residence is vital to making the most out of your tax return.
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