TAX TIPS YOU MISSED!

OK my friends.... If you didn't take my advice on my tax tips article, we'll reiterate what you may have missed. If you did miss some tax breaks, there's always planning for next year. Listen up!! Free money time, here goes.

Now most of you homeowners have deducted your mortgage interest, right? So what, that's the easy deduction. Let's get to the ones you missed. Starting with points...

These are the fees paid to mortgage lenders and are considered a form of prepaid mortgage interest. "That means they are fully deductible the year you take out the mortgage, says Bill Abrams, a tax attorney with Abrams Garfinkel Margolis Bergson, who works in New York City and Los Angeles."

Now this only works if you bought a home this year. If you paid points to refinance a home, you can take them off your income but the deductions have to be spread over the life of the loan. Take advantage!

If you plan to sell one investment property and buy another, consider what is known as a "like-kind exchange". It's fairly common among larger investors, so small investors take note. Instead of paying taxes on the property you sell, then buying another property, you can trade it, just like baseball cards! As Forbes.com stated "The taxable gain is deferred until you cash out, but there is no limit on the number of times you can exchange. A few caveats: You have to find the replacement property within 45 days of selling the old real estate and close on it within 180 days. Your cost basis for the new place will be the same as your cost basis for the old. And you can't do this with your home."

There appears to be many homeowners who have a "vacation" home and also rent it out but aren't taking advantage of the tax benefits. If you use the property for 14 days or 10% of its rental time, you can consider it an investment. Which means you can write off all expenses, from depreciation to A/C replacement. Also, if repairs exceed rental income, you can record a loss. On the contrary, if you have it as personal property , you can deduct expenses from the rental income but cannot record a loss.

Damage deductions anyone? If you suffered property damage from a hurricane, floods or other sudden events, you can deduct costs that were not covered by insurance or reimbursed in other ways, says Kenneth M. Hart, a tax lawyer at Gunster Yoakley & Stewart in West Palm Beach, Fla. The costs must exceed 10% of your Adjusted Gross Income plus $100 per loss and are not subject to Alternative Minimum Tax limitations.

You can deduct all property taxes, whether you own one home or ten. However, mortgage interest is only deductible on your primary residence and one other home, only.

Lastly, if you prepare to sell your home, make sure you have lived in it for the last 2 out of 5 years, and it will be TAX FREE MONEY!! You have up to $250,000 of tax free money for a single person. If you are married you have up to $500,000, respectively. Time your marriage precisely. MUAHAHA!

As always, any questoins please do not hesitate to call me at 303-601-7222!

Thanks-
Jerome