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Interest and property taxes
Home mortgage interest on up to $1 million of home
acquisition loans secured by your principal residence
and/or second home is fully deductible. You may also
deduct mortgage interest on a home equity loan or line
of credit (up to $100,000). Points paid to secure a loan
for the purchase or improvement of a principal residence
are usually fully deductible in the year you pay them.
Points paid to refinance an existing mortgage must be
deducted over the life of the loan. Real estate taxes
and state and local property taxes on all your real
estate are deductible.
Exclude capital gains
When you sell your principal residence, you can
exclude from income up to $250,000 in gains ($500,000 if
married and filing jointly). To qualify, you must have
owned and used your home as a principal residence for at
least two years during the five-year period ending on
the date of sale. The full tax break is available once
every two years.
» Next:
Retirement tax
breaks
This article was provided by the American Institute of Certified Public Accountants (AICPA).
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