What are the major tax benefits of homeownership?
In terms of federal taxes, you will generally be able to:
___Write off interest costs on acquisition financing with a principal balance of up to $1 million.
__Write off interest costs on a second mortgage or home equity loan with a principal balance of up to $100,000.
___Write off property taxes on your personal residence.
___Write off up to $500,000 (if married, $250,000) in profits when you sell a prime residence that you have occupied for two of the past five years.
___If you have not previously owned property, it is likely that you will switch from a standard deduction to an itemized deduction when you become a homeowner. It is probable that this switch will allow you to take some write-offs that are not now available with the standard deduction.
While the items above are general benefits, the actual rules can be complex. Press here for an overview of taxes, mortgages and real estate. For details, please see a tax professional.
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