J.K. Lasser's^TM Homeowner's Tax Breaks 2005: Your Complete Guide to Finding Hidden Gold in Your Home

by Gerald J. Robinson (Carb, Luria, Cook & Kufeld, LLP )

• ISBN13: 9780471647713
• ISBN10: 0471647713
• Edition: 2nd
• Format: Paperback
• Copyright: 2004-11-01
• Publisher: WILEY

Summary

Proven tax strategies that any homeowner can use to maximize the benefits of home ownership There are 65 million homeowners in the U.S. And there are almost as many tax savings opportunities offered to them. Beyond the garden-variety deductions for mortgage interest and real estate taxes, J.K. Lasser's Homeowner's Tax Breaks, Second Edition reveals a treasure chest of tax breaks that any homeowner can use. These include such little-known breaks as getting tax-free rent from a short-term home rental, using the generous $250,000/$500,000 home sale exclusion to shelter gain from the sale of other real estate, and pocketing tax-free mortgage proceeds when trading up to a more expensive home. A lively, concise, and plain-language explanation of tax rules for homeowners, this ultimate resource for all homeowners has been completely updated to reflect all the changes in the tax law. Gerald J. Robinson (Stamford, CT) is an attorney at Carb, Luria, Cook and Kufeld, LLP. He is the author of the treatise, Federal Income Taxation of Real Estate-currently in its sixth edition-which is considered the bible of real estate tax for practitioners. Mr. Robinson holds an LLM in taxation from New York University.

Author Biography

Gerald J. Robinson, Esq., tax counsel to the New York City law firm of Carb, Luria, Cook and Kufeld, is a member of the New York and Maryland bars. He received his BA degree from Cornell University, an LLB from the University of Maryland, and an LLM in Taxation from New York University. Prior to entering private practice, he served in the Office of Chief Counsel, Internal Revenue Service. He is the author of the treatise, Federal Income Taxation of Real Estate, now in its sixth edition, and wrote the monthly newsletter, "Real Estate Tax Ideas," both published by Warren, Gorham and Lamont. He is also a frequent lecturer and contributor to various professional journals. He hates to pay taxes.

Table of Contents

Preface	xvii
Part I Sheltering Your Income with Home Deductions
Deductions in Year You Buy Your Home	3	(15)
Overview	3	(1)
Real Estate Taxes in the Year You Buy: Get Your Proper Share	4	(3)
Mortgage Points: How to Assure Deduction	7	(3)
Moving Expenses: Does Your Move Qualify for Deduction?	10	(2)
How Should Married Couples Take Title to Their Home?	12	(1)
Purchase Expenses: The Importance of Records	13	(1)
Helping with the Down Payment: First-Time Homebuyer's IRA Break	14	(2)
Purchaser's Tax-Planning Checklist	16	(2)
Recurring Deductions Every Year You Own Your Home	18	(33)
Overview	18	(1)
Planning to Maximize Deductions	19	(1)
Deduct All Your Real Estate Taxes	20	(1)
Tax Magic of Home Mortgages: Your Interest Deductions	21	(1)
Refinanced Home Mortgage---Watch Out for Interest Deduction and Points	22	(2)
Home Damaged? Let the IRS Help Pay!	24	(5)
How to Boost Your Damage Loss Deduction	29	(2)
When Your Damage Is from a Presidentially Declared Disaster	31	(2)
How to Deduct Your Home Office Expenses	33	(1)
Eligibility of Employees	33	(2)
Eligibility of Business Owners	35	(2)
Figuring the Deduction	37	(9)
If You Work outside Your Home: How to Get Home Office Deductions	46	(1)
How Home Office Makes Commuting Costs Deductible	47	(2)
Deduct Your Home Office Equipment Cost---Up Front	49	(2)
Special-Situation Deductions for Homeowners	51	(26)
Overview	51	(1)
How to Get Tax-Free Income from Short-Term Rental	51	(2)
How to Make Your Credit Card and Car Loan Interest Deductible	53	(4)
How to Deduct Cost of Medical Home Improvements	57	(3)
Deductible Home Improvements for the Disabled	60	(1)
How an Employee Gets a Tax Break for a ``Sideline'' Business	61	(3)
Deduction of Fees for Home Tax Advice	64	(1)
Tax-Wise Borrowing against Your Home for Business	65	(2)
Renting a Part of Your Home	67	(1)
Renting Your Entire Home	68	(5)
Your Home as a Retirement Nest Egg	73	(1)
Battling Condo or Co-op Board	73	(1)
Suing the Builder: Tax-Free Proceeds	73	(4)
Part II Tax Shelter When You Sell Your Home
How to Sell Your Home with No Tax on Gain	77	(27)
Overview	77	(1)
How to Plan for the Sale	78	(1)
Exclusion of Up to $250,000 or More of Gain	79	(1)
How to Qualify for the Exclusion	80	(3)
Exceptions to the Two-Year Rule: Job Change, Health Problems, or Unforeseen Circumstances	83	(4)
Married Couples: How to Get the $500,000 Exclusion	87	(4)
Is Your Home Your ``Principal Residence''?	91	(2)
Your Home Office: Does It Qualify?	93	(1)
Vacant Land Can Qualify	93	(1)
Snowbirds: How to Deal with the Southern Home Trap	94	(2)
Gain in Excess of the Exclusion	96	(2)
How to Cope with a Depressed Market by Rental before Sale	98	(1)
How to Avoid Reporting to the IRS	99	(4)
Seller's Tax-Planning Checklist	103	(1)
The High-Priced Home: How to Avoid Tax When Gain Will Exceed the $250,000 or $500,000 Ceiling	104	(20)
Overview	104	(1)
Upper-Middle-Class Victims	105	(1)
Tax Time Bomb	106	(1)
Tax Idea 1: Deferred Sale Approach	107	(1)
Tax Idea 2: The Leasehold Carve-Out	108	(3)
Tax Idea 3: The Installment Sale	111	(4)
Tax Idea 4: Conversion to Rental and Exchange	115	(1)
Summing Up	116	(8)
When Spouses Split	124	(9)
Overview	124	(1)
Don't Lose the Exclusion on Principal Residence Sale!	124	(1)
Transfer of Home to Spouse	125	(1)
Is It Smart to Sell Prior to Divorce?	126	(1)
How to Avoid Gain on a Vacation Home	127	(1)
Splitting Up Marital Property: Beware the Tax Trap	128	(5)
Part III Tax Shelter from Homeowner Loopholes and Vacation Homes
Little-Known Loopholes Can Provide Big Savings	133	(20)
Overview	133	(1)
The Super Loophole: How to Use Home Sale Exclusion to Shield Gain on Other Real Estate from Tax	133	(3)
How to Buy a Vacation Home with Tax-Free Dollars from Sale of Rental Property	136	(4)
Avoiding Tax When Your Land Includes Both House and Investment Property	140	(2)
Your Appreciated Residence Is a Tax Treasure: How to Trade Up and Get Tax-Free Cash	142	(1)
Home Improvements: Handyman's Special Tax Shelter	143	(2)
Home Improvement Business: Tax-Free Income for Renovators	145	(1)
When a House Is Not a Home: How to Deduct Loss on Sale of Home	146	(2)
How to Get a Charitable Deduction for Your Home---And Still Live in It	148	(4)
Every Homeowner's Hidden Loophole: Nontaxable ``Imputed'' Income	152	(1)
Your Vacation Home Is a Tax Shelter	153	(24)
Overview	155	(1)
Scenario 1: Use of Vacation Home Exclusively as Vacation Home	156	(1)
Scenario 2: Use for Vacation and Rent for 14 Days or Less	157	(1)
Scenario 3: Use for Vacation and Rent for More Than 14 Days	158	(1)
Tax Loss from Rental Not Allowed	158	(3)
Figuring the Amount Deductible	161	(4)
Scenario 4: Rent to Others for the Entire Year	165	(1)
Need for Profit Motive	165	(1)
Figuring Amount of Tax Shelter	166	(2)
Hidden Nugget: A Little Personal Use	168	(1)
Depreciation: The Deduction without Cash Outlay	168	(4)
Tax Shelter Rules	172	(5)
Part IV Retirement Benefits and Estate Planning
How to Get Tax-Free Dollars in Retirement from Your Home	177	(9)
Overview	177	(1)
Tax-Free Trading Down	178	(1)
How Trading Down Increases Cash Flow	178	(1)
How Much Cash from Trading Down?	179	(1)
The Tax Benefit	180	(1)
Tax-Free Reverse Mortgages	181	(1)
What Is a Reverse Mortgage, Anyway?	181	(1)
The Tax Benefit	182	(1)
How Much Cash Flow Can You Get?	183	(1)
What Type of Reverse Mortgage Is Best for You?	184	(2)
Reducing Estate Tax on Home	186	(17)
Overview	186	(1)
Should Spouses Own Home Jointly?	187	(1)
Do You Need Estate Tax Planning?	188	(2)
Larger Estates: How Not to Lose the Second Exemption	190	(2)
How Parent Can Cut Taxes on Vacation Home	192	(3)
Estate Planning for a Parent's Home: Using Sale--Leaseback to Shift Appreciation in Value	195	(4)
How Parents Can Escape Estate Tax on Their Homes: The Qualified Personal Residence Trust	199	(4)
Epilogue	203	(4)
Appendix A Instructions for Form 8829	207	(6)
Appendix B IRS Publication 521: Moving Expenses	213	(22)
Appendix C IRS Publication 530: Tax Information for First-Time Homeowners	235	(12)
Index	247