Great article over at Bankrate.com entitled, “5 homeownership tax myths”.
Here are the most common misconceptions people have about owning and selling their homes:
1. Mortgage interest will reduce my tax bill.
2. All costs related to my home are deductible.
3. I must use home profits to buy a new home.
4. Putting my children on the deed is tax-smart.
5. If I take a loss on a sale, I can write it off.
Definitely read the article, it’s got some good tips.
Most important tip, and one I hadn’t thought a lot about, is #4 – putting your children on the deed to your home. The idea being, if they are part owners, then they won’t have to go through probate when you die.
Uh-uh. Taking that step can end up being just about the worst thing you could do. As part owners, your children may have to pay a much higher capital gains tax, when they end up selling, because the clock starts ticking on profit, the day they sign the deed. If the children become owners when you die, the clock is “reset”, and their cost basis becomes its appraised value, on the day you die, so profits will be much less. (This means they are much less likely to have to pay any estate tax.)
Read the story for a much better explanation … and consult a tax attorney.
Full story: 5 ownership tax myths – By Kay Bell, Bankrate.com
Contact me to find to set up an appointment to start your Boston condo buying process.
SEARCH BOSTON CONDOS FOR SALE
- Back Bay Boston condos for sale
- Beacon Hill Boston condos for sale
- Charlestown Boston condos for sale
- Charlestown Navy Yard Boston condos for sale
- Downtown Boston condos for sale
- Dorchester Boston condos for sale
- Dorchester Heights Boston condos for sale
- Fenway Boston condos for sale
- Jamaica Plain Boston condos for sale
- Leather District Boston condos for sale
- Midtown Boston condos for sale
- Seaport District Boson condos for sale
- South Boston condos for sale
- South End Boston condos for sale
- Waterfront Boston condos for sale
For more information please contact one of our on-call agents at 617-595-3712.