Real estate taxes and loan interest for income tax purposes (apartment, rental)

[mathjak107]

Originally Posted by bellakin123

Huh?? Most people are happy when they buy a home because they finally get a deduction. I deduct my taxes and mortgage interest on my one-family residence. Not sure what you mean by investment properties only.

first off the deduction isnt a benefit. your spending 3 or 4 dollars above the price of the house to get back one. your far better served with no extra expense and no deduction.

you also dont see a dime extra before you clear the standard deduction .

both a renter and home owner get the same standard deduction.


you can be a homeowner couple but if your deductions dont top 11,900.00 you wont see one penny difference even if you paid interest and real estate taxes..

it can really be the renter who wins tax wise. he may not be spending anywhere near 11,500 in deductable expenses and pockets the rest as a refund without actually spending that much.

the homeowner may be pulling that extra dough right out of the piggy bank to pay those bills and gets nothing back until the standard deduction is passed.

what is that poster talking about with investment properties?????????


real estate taxes are deductable on your primary home as long as you dont trip the amt tax .its deductable on any property you own as well..

[mathjak107]

Originally Posted by bellakin123

You're not losing your mind. Being a homeowner has tax benefits. When we rented and had no kids, our returns were horrible. If you just purchased your home, you can deduct some of the closing costs on your next tax return. Are you using Schedule A? That should be the form for itemizing.

so if deductions are such a good thing why not pay more in taxes and mortgage interest????????????? the answer is your pulling 4 dollars out of your pocket over and above the price of the house which you arent counting as being spent when you get back 1 of them as a tax refund.

folks wake up with these deductions,they arent a good thing. these bills your paying for taxes and interest are no different than your electric bill,your gardner , the water bill or your cable bill. the fact you get a rebate of a buck or so doesnt make it any better or a benefit. its all just an expense.

the deduction reduces the expense but its not helping your income at all. want to help your income ,get rid of the expenses and get rid of the deductions.

[Gpsma]

Originally Posted by bellakin123

If I'm not mistaken, that can be for multiple properties also, right?

You can also deduct mortgage and taxes on a second (vacation) home.

[2011littlehouse]

As a rational and somewhat cynical person, I always saw things like dman and mathjak.

But now, simply trying to make the best of it...
While on the topic of these deductions, what else house-related is deductible?:
- mortgage interest
- real estate taxes
- part of closing (origination fee, points if any, what else?)
- is the mortgage tax (tax on the mortgage) deductible?
- other? (are any repairs, or moving costs, if staying within the area, deductible?)

---
In the broader sense, what other things do you deduct? - I have been doing standard deductions for years, so never bothered to save receipts...

[Smash255]

Originally Posted by 2011littlehouse

As a rational and somewhat cynical person, I always saw things like dman and mathjak.

But now, simply trying to make the best of it...
While on the topic of these deductions, what else house-related is deductible?:
- mortgage interest
- real estate taxes
- part of closing (origination fee, points if any, what else?)
- is the mortgage tax (tax on the mortgage) deductible?
- other? (are any repairs, or moving costs, if staying within the area, deductible?)

---
In the broader sense, what other things do you deduct? - I have been doing standard deductions for years, so never bothered to save receipts...

Mortgage Insurance

[mathjak107]

bacareful crunching any numbers figuring deductions. as time goes on that mortgage interest deduction gets smaller and smaller .

while the equity grows in the house hopefully with each mortgage payment that does not help cash flow once your paying the full amount of that mortgage payment and getting nothing back.

more and more of us are also getting hit with the amt tax which is no longer a tax for the rich.

you can kiss your real estate tax deduction goodbye as well if hit fully with it.

i tell everyone who brings up deductions on a home to forget about including them in your calculations for cash flow as they really amount to nothing more than the emperors new clothes.

while its nice to use a coupon for paying expenses or get a rebate basically thats all your deduction is . you spend 4 extra bucks out of pocket and it will credit your tax return with 1 of those extra dollars spent over and above the price of the house.

not many folks even realize they wont see a penny difference until they clear the standard deduction either. they just figure they will get back 25-28% of whatever their payment is.

nope..... it dont work like that.

[Zytos]

Originally Posted by mathjak107

not many folks even realize they wont see a penny difference until they clear the standard deduction either. they just figure they will get back 25-28% of whatever their payment is.

nope..... it dont work like that.

I haven't looked at my 2011 return lately but if you can afford to buy on LI, you will probably be itemizing. The deduction for NY State income tax alone means it makes sense to itemize.

AMT though is another matter and like you and others said, it cuts into your return.

[dman72]

A house is a bad investment (especially on LI) and "needing deductions" is a really bad reason to buy a house.

You buy a house because you want one for your family and because you can afford it and want to stay in an area for a long time. If you buy it for financial reasons, it's a mistake.

The problem with LI is that inventory on rental houses pretty much sucks, so if you want to go that route (a better financial move) prepare to be dissapointed.

[Tekzilla]

If we are married and in the 25% tax bracket and our Property Tax bill is $9800, what can we expect back? Even a ballpark guess?

[mathjak107]

you really have to work it through something like turbo.. reason is you may be in the marginal 25% bracket but alot of that may be going through at lower brackets.

it all depends on your overall total deductions and total income.