7 Housing Tax Laws You Need to Know!
In 2009, those tax benefits are back. And the American
Recovery and Reinvestment Act stimulus measure that became law in
February expanded the dollar amount of these credits and made them
available through 2010.
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| Tax credits in 2009 and 2010
for energy-efficient home improvements |
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For
each of these qualifying improvements made to your home between Feb.
17, 2009, the date the latest stimulus act became law, and Dec. 31,
2010, you can claim a tax credit of up to 30 percent of the product's
cost. There is a maximum credit cap of $1,500 per homeowner for all
improvements combined.
For products
purchased between Jan. 1 and Feb. 16, the available tax credits are
less clear because the new legislation essentially overwrote the
previous law reinstating the energy improvement. The IRS should clarify
how these credits can be claimed later this year. In the meantime, hang
onto to any receipts for all home energy improvement products purchased
this year.
Also keep in mind that any
home energy credits you previously claimed must be taken into account.
That means that if in 2007 you claimed credits of $200 for storm
windows and $300 for a new air conditioning unit, the $500 total counts
toward the $1,500 limit now in place. Those earlier credits also must
be carried forward if you claim a tax credit for some more
nonconventional energy improvements on your 2008 return.
Improvements
must meet or exceed specific energy-saving standards. Additional
product and tax savings guidelines can be found at the U.S.
government's Energy Star Web page.
For all tax years and all types of home energy improvements, you'll need to file IRS Form 5695 to claim your credits.
7. Second-home sale limits
To help pay for many of the new housing-related tax breaks, the tax law
affecting second-home sales was changed beginning in 2009.
Thanks
to a provision of the Housing and Economic Recovery Act of 2008, the
U.S. Treasury now should make more money off second home sales.
Previously, owners of multiple properties could move into one of their
other homes, live there as their primary residence for two years and
then sell the house and pocket any gains tax-free up to $250,000 if
single, $500,000 for a home owned by a married couple filing a joint
return.
Now, however, the time that the
property was a second home or investment property must be taken into
account. The owners now will owe tax on part of the sale money based on how long the house was used as a second, rather than their main, home.
As
with the surviving spouse home sale exclusion change, the taxation of
second home sale profit also is a permanent tax law change.
Of
course, "permanent" doesn't always mean forever on Capitol Hill.
Neither is there any guarantee that temporary tax breaks will be
extended.
So keep an eye on all these
home-related tax changes. If any can help you, be sure to take
advantage of them while they still are on the books.
Posted: April 2, 2009 Page | 1 | 2 | 3 | 4 |