Lifestyle real estate newsletter | February 2019
Maximizing Your Tax Strategy with Real Estate
In my opinion, you don’t have to be a real estate investor to receive tax benefits when it comes to owning real estate. Of course, you should work with your accountant to make sure you are applying all rules correctly to your particular situation.
Here are some basics to keep in mind:
Itemizing Interest and Property Taxes – Recent changes in the tax laws via the Tax Cuts and Jobs Act may have some folks choosing the standard deduction rather than itemizing items such as mortgage interest and real estate taxes. Before you assume you should take the easy route and take the standard deduction, do the math. Here are a few facts about these deductions: •Mortgage Interest Deduction is limited to interest paid on up to $750,000 of mortgage debt incurred after 12/14/17 to buy or improve a first or second home •The property tax deduction is capped at $10,000 However, if the amount you pay for
these items falls under those limits and you need to reduce your adjusted gross income for the year, you may be able to prepay and increase your deductions for the current year. For example, you may consider prepaying your January mortgage in December or your property taxes, increasing your deductions. Also, for many mortgages, the first full year of the mortgage has the most owed in interest due to amortization. Furthermore, if points (prepaid interest) are paid when the loan is originated that may also be deductible. This is good information to have when considering a purchase or refinance. Again, check with your accountant before assuming the above are the right steps for you to take.
Profits from The Sale of a Home
Also known as the capital gains tax, if there is a profit made on the sale of a home, it is taxed. However, the first $250,000 for individuals and $500,000 for joint filers is excluded so long as the owners have lived in the property as a primary residence for two of the last five years. For example, say you purchased a home in 2005 for $300,000. You sold
it in 2018 for $600,000. You have lived in this home by yourself and it has served as your primary residence for this entire time. You have made $300,000 on your investment, but the first $250,000 is not taxed. In addition, if you made improvements to the property in that time (not maintenance, but improvements), then you can also offset your gains by the amount you invested in those improvements. For example, if you added a sprinkler system or added a bathroom in the basement, those are improvements. Keep those receipts and keep careful track. Additional rules apply and I recommend reviewing with your accountant.
Questions? I recommend reaching out
to your accountant to review your tax situation as it pertains to real estate, and if he or she gives you advice that has you looking to upgrade your current home, make a move, or start looking for an investment, reach out! Source: The Lones Group 2019
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Happy Valentine's Day!
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Thank you for your friendship and fun~Nina RE/MAX Town Center | REALTOR BrokerÂ
The most sincere compliments I receive are the personal referrals from you. Thank you so much! . Remember how much fun we had finding your home? I’d love to help them create that memory too.
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Market watch update | see the market trending in your county
Median sale price: $676,475 Average sale price: $802,721 List to sale price: 101.8% Months of Inventory: 1.7 Days on Market: 24
King County
Snohomish County
Snohomish County
Median sale price: $479,950 Average sale price; $519,441 List to sale price: 100.9% Months of Inventory: 1.6 Days on Market: 26
Pierce County
Pierce County
Offered at $440,000 MLS 1403070 CDOM 5 3 Beds | 2 Bath | 1340 Sq Ft TU
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Nina Bjornstal Represented: Buyer
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Median sale price: $344,000 Average sale price: $378,519 List to sale price: 100.8% Months of Inventory: 1.6 Days on Market: 31
14524 Silver Firs Drive Everett 98208
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Median sale price: $345,000 Average sale price: $380,601 List to sale price: 100.7% Months of Inventory: 1.6 Days on Market: 31
Median sale price: $479,995 Average sale price; $519,265 List to sale price: 101% Months of Inventory: 1.5 Days on Market: 25
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Median sale price: $675,000 Average sale price: $801,134 List to sale price: 100% Months of Inventory: 1.7 Days on Market: 25
King County
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If your home is currently listed this is not a solicitation for your listing, please disregard this mailer. | 2019 Lifesytle real estate by nna