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2019 Idaho Real Estate Blog

Important Tax Write-Offs Main Boise Home Loans
How often do you expect our government to give you a handout? Well, when it comes to your home and the fees and interest associated with it, you're in luck! Read on to see if you are taking advantage of all the possible tax deductions you can. It pays to pay attention!

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Dear BuildingCredibility.com visitor:

 

Tax write-offs are how our government rewards taxpayers, and our government is especially fond of people borrowing money to buy homes. There are plenty of tax write-offs available to you associated with home ownership. Are you taking advantage of all of them?

 

POINTS:

 

According to the IRS, mortgage origination fees charged as points must be paid for the use of the money in order to be tax deductible. Mortgage origination fees that are considered "service fees" are not tax deductible. I am not a tax advisor, but the basic question that needs to be answered is, "Does the fee apply to the use of money, or is it a service fee?" For more information on interpreting your unique situation, contact your tax professional, or read IRS Publication 936. (http://www.irs.gov/publications/p936/ar02.html#d0e942)

 

PRE-PAYMENT PENALTIES:

 

Sometimes borrowers need to pay off their mortgages sooner than expected (selling a home earlier than expected or refinancing to pull equity out are the most common). Fortunately, pre-payment penalties are tax deductible.

 

PRO-RATED REAL ESTATE TAXES:

 

Even if a seller sent the tax collector a check to pay real estate taxes, there are probably a portion of the taxes that a buyer paid at closing pro-rated. Be sure to deduct your fair share.

 

PRO-RATED MORTGAGE INTEREST:

 

Depending on when you close on the purchase of your home, you may pay a large or small amount of pro-rated mortgage interest for that month. All of that interest is deductible. The HUD-1 statement you receive at closing shows exactly how much you paid.

 

HOME CONSTRUCTION INTEREST:

 

As long as you build your home in less than two years before you make it your primary residence, all associated construction loan interest is fully deductible.

 

As you can see, all these write-offs can add up to a considerable about of tax savings. You can definitely say this: It pays to pay attention! If you would like to discuss any of the tax deductions mentioned in this blog, feel free to call me. However, I am not a tax professional, and I may refer you to my CPA or your tax professional. Our office number is (208) 880-0316, or you can locate us on the web at http://www.millennium-mortgage.com/.

 

Regards,

 

 

Eric Leigh, Senior Loan Officer

Millennium Mortgage & Insurance, Inc.

 
Posted by Eric Leigh at 5/29/2007 4:20:00 PM
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