KentuckyHomesByJudy-Blog

The tax benefits of owning both a first and second home can be significant, with the IRS allowing taxpayers to deduct interest and property taxes on both properties as itemized deductions on their tax returns, albeit with certain limitations. Interest deductions are limited to the amount of debt incurred to buy, build, or improve the first and/or second home, with a maximum cap of $750,000. Property taxes, falling under the limitation of state and local taxes as set forth in the TCJA of 2017, are capped at $10,000 per year. However, while second homes enjoy these benefits, they do not qualify for the Section 121 exclusion sale of principal residence rules. These rules only apply to a taxpayer's principal residence, allowing couples filing jointly to exclude up to $500,000 of capital gain from the sale of their primary home, and single filers up to $250,000 of gain, provided they have owned and used the property as their principal residence for two out of the five preced

The gain on the sale of your home is determined by the price you sell the home, less selling expenses, less the price you paid for it, plus the capital improvements made during the time you owned the property. IRS and accounting use the term "basis" to describe your cost in the home.   It is a dynamic number that changes over time based on capital improvements that are made and capital losses that are incurred.   What is called the tax basis may better be referred to as cost basis.   It is the taxpayer's cost in the property used to determine the tax on the gain of the sale. The calculation begins with the purchase price of the property plus certain capitalized acquisition costs that were owed by the seller but were paid when purchased.   Examples would include real estate taxes owed through the day before the sale date, back interest owed by the seller, and charges for repairs that were the seller's responsibility.   Capital improvements made to the prop

Owning a home has long been considered a fundamental part of the American dream. It represents far more than just having a place to live�it embodies values, aspirations, and a sense of security. Here's why homeownership is widely regarded as a key component of the American dream: Stability and Roots: Owning a home provides a sense of stability and roots in a community. It allows individuals and families to establish themselves, put down roots, and create a sense of belonging. Wealth Building: Homeownership is often seen as a pathway to wealth building. By building equity over time, homeowners have the potential to accumulate wealth, establish financial security, and pass down assets to future generations. Personalization and Pride: Homeownership grants the freedom to personalize and customize a space according to personal taste and style. It offers a sense of pride and accomplishment, as homeowners can create a place that truly reflects their identity and values. Co

Are you in the market for a new home and wondering which mortgage option is right for you? While the world of home financing offers a surplus of choices, one option often overlooked is the Adjustable Rate Mortgage, or ARM. If you're in a market where interest rates are trending lower, an ARM could be the key to significant savings and financial flexibility. The problem is simple, while you're waiting for interest rates to come down, the price of homes are still going up.   Any savings from the lower interest rate could more than be offset by the increase in purchase price due to appreciation.   Buying at today's prices with an interim loan might be the answer. Picture this: You've found your dream home, and it's time to secure financing. An ARM often starts with a lower initial interest rate than a fixed-rate mortgage. This means your monthly payments will be more manageable from day one, allowing you to allocate your budget wisely. In a market wher