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Seller FAQ |
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Tax Considerations |
 Are seller-paid points
deductible?
Are taxes on second homes deductible?
Can I deduct the loss I suffered when
I sold my home?
What are the rules on capital gains
when inheriting a house?
What home-buying costs are deductible? |
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Question: Are seller-paid points deductible?
Answer: As
of Jan. 1, 1991, homeowners have been able to
deduct points paid by the seller. This deduction
previously was reserved only for points actually
paid by the buyer. |
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Question: Are taxes on second homes deductible?
Answer: Mortgage
interest and property taxes are deductible on
a second home if you itemize. Check with your
accountant or tax adviser for specifics. |
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Question: Can I deduct the loss I suffered when I sold my home?
Answer: The Internal Revenue Service currently does not allow deductions for losses
on the sale of your own home. In fact there's no way to use a loss on the sale
of your principal residence to your advantage on your income tax return. |
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Question: What are the rules on capital gains when inheriting a house?
Answer: When
children inherit a home, the Internal Revenue
Service determines their basis in the property
on the date of the owner's death. The cost
basis is not the amount the owner originally
paid for the house, but the property's fair-market
value on the date of the parent's death.
Cost
basis is a tax term for the dollar amount assigned
to a property at the time it is acquired, for
the purpose of determining gain or loss when
it is sold. For example, one of the three siblings
sold his or her share of a property to be divided
equally, he or she must pay capital gains tax
for whatever profit made over one-third of
the new basis.
Other tax consequences include
estate taxes. However, the estate must total
$675,000 or more for tax year 2001 before tax
issues become a concern. The IRS allow residents
to pass on property, cash and other assets
worth up to a total of $675,000 for tax year
2001 before charging the heirs any taxes. This
figure will rise each year for the next several
years.
Regarding
the transfer of ownership, quit-claim deeds
often are used between family members in situations
such as this when an heir is buying out the
other. All parties must be agreeable to dropping
a name from the title. For more information,
consult the IRS's Publication 950, "Introduction
to Estate and Gift Taxes." Order
by calling (800) TAX-FORM. |
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Question: What home-buying costs are deductible?
Answer: Any
points you or the seller pay to purchase your
home loan are deductible for that year. Property
taxes and interest are deductible every year.
But while other home-buying costs
(closing costs in particular) are not immediately
tax-deductible, they can be figured into the
adjusted cost basis of your home when you go
to sell (any significant home improvements
also can be calculated into your basis). These
fees would include title insurance, loan-application
fee, credit report, appraisal fee, service
fee, settlement or closing fees, bank attorney's
fee, attorney's fee, document preparation fee
and recording fees. Points paid when you refinance
an existing mortgage must be deducted ratably
over the life of the new loan. |
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HOME VALUATION |
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FEATURED PROPERTIES |
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| City |
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San Mateo |
| Bed/Bath |
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2/1 |
| Sq ft |
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N/A |
| Asking Price |
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$777,000 |
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| City |
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S. San Francisco |
| Bed/Bath |
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4/2.5 |
| Sq ft |
| |
2410 |
| Asking Price |
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$868,000 |
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| City |
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San Carlos |
| Bed/Bath |
| |
3/2 |
| Sq ft |
| |
2050 |
| Asking Price |
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$1,385,000 |
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| City |
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San Mate |
| Bed/Bath |
| |
1/1 |
| Sq ft |
| |
692 |
| Asking Price |
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$395,000 |
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 |
| City |
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San Mate |
| Bed/Bath |
| |
2/1 |
| Sq ft |
| |
918 |
| Asking Price |
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$435,000 |
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| City |
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Foster City |
| Bed/Bath |
| |
3/2 |
| Sq ft |
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1,540 |
| Asking Price |
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$798,000 |
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| City |
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San Mateo |
| Bed/Bath |
| |
2/2 |
| Sq ft |
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N/A |
| Asking Price |
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$529,000 |
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| City |
| |
San Mateo |
| Bed/Bath |
| |
2/2 |
| Sq ft |
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1213 |
| Asking Price |
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$535,000 |
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Virtual Tour |
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| City |
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San Mateo |
| Bed/Bath |
| |
3/2.5 |
| Sq ft |
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1312 |
| Asking Price |
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$775,000 |
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| City |
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Redwood City |
| Bed/Bath |
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5/3 |
| Sq ft |
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N/A |
| Asking Price |
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$1,399,950 |
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| City |
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San Mateo |
| Bed/Bath |
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2/2.5 |
| Sq ft |
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1,254 |
| Asking Price |
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$750,000 |
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| City |
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San Mateo |
| Bed/Bath |
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2/1 |
| Sq ft |
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1,130 |
| Asking Price |
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$935,000 |
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| City |
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Redwood City |
| Bed/Bath |
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4/3.5 |
| Sq ft |
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2,951 |
| Asking Price |
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$1,626,000 |
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