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Monday, June 8, 2015

House value jumping? Save home improvement receipts

If you own your home, remember that as your home gains equity, you net worth increases and you could find yourself paying more in taxes.  

The best way to combat this potential increase would be to appeal your property taxes.  If you are looking for an expert to represent you, contact the Property Tax Appeal Group, LLC, also know as pTag.

NEW YORK – June 8, 2015 – A "tax time bomb is ticking" for a growing number of homeowners who have been fortunate enough to realize big gains in the values of their residences, says New York Times columnist Ron Lieber. 

Single homeowners with gains of more than $250,000 and married people with at least $500,000 could end up paying a federal tax as high as 23.8 percent on money earned above those amounts when it's time to sell. Depending on location, additional state taxes could loom for some too.

For current homeowners who see this as a possible problem when they decide to sell, Lieber has a suggestion: There's a "small pile of paperwork" they should begin filing away now – paperwork for all the improvements they've made to the property, because those costs count against the gains when it's time to sell.

Since even a single remodeling can offset the gains by many thousands of dollars, the savings when it's time to sell can be substantial.

Currently, Zillow estimates that 3.8 percent of U.S. homes nationwide are now in the tax zone for single people, and 1.2 percent of married couples have reached the threshold.

However, the number of people affected is much higher in expensive cities, such as San Francisco and New York.

"The Bible for all of this is Internal Revenue Service Publication 523: Selling Your Home," says Lieber. On page 12, homeowners can find the IRS-approved list of things that can be subtracted from a gain to determine whether it's below or above the $250,000/$500,000 limit.

Source: New York Times (06/06/15) Lieber, Ron
© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

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