It's that time of year again and tax questions, particularly about Real Estate are on many home owners minds (and recent home owners). Two relatively new phenomena, "the Short Sale" and "Private Mortgage Insurance" (PMI) have created a need to make some changes to the tax code. For those of you that have lost your home or condo, or bought a house in 2007, and put down less than 20% this could be very important Real Estate Tax information.
I'm not a tax person so I can't give tax advise, but I can give you a heads up, so that you can alert whoever does your taxes about some changes in the code that are Real Estate specific, and I can give you an overview of those changes. Here goes. I hope you find them useful.
The first change has to do with short sales, bank repos, foreclosures Etc. In the past when housing lenders forgave all or even part of your debt on your house, the IRS usually considered it a taxable event and you owed taxes on the amount forgiven. Under the new law, if the debt was forgiven in 2007, 2008, 2009 you can probably exclude that on your taxes. I never thought this made sense anyway. If a home owner couldn't make house payments they probably didn't have the money to pay the IRS.
The next change deals with Mortgage Insurance, and home owners whose income is less than $100,000 per year. Private Mortgage Insurance is that extra amount typically required when more than 80% of a homes value is financed. In the sub-prime loan arena that is a huge number, but does not include insurance written prior to 2007. However, even with that restriction, judging by the number of sub-prime loans we read about, many homeowners will benefit from this change.
As an aside, but tax related, if you purchased a home last year, don't forget to take your closing docs to your accountant. Some of your closing costs could be deductible. If you have misplaced your papers, on your new home purchase, contact your Real Estate agent for a copy.
For other articles on Real Estate taxes, go to our web site Salt Lake Homes and click on the ABC Icon and peruse the many articles available. You can also reach us at 801-567-0946.
Thanks for being here, and remember, it's that time of year again, hope weve helped with your Real Estate tax questions.
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