SAN DIEGO, May 17, 2014 /PRNewswire-iReach/ -- LoanLove.com is a borrower advice website that offers in-depth information on home loans that experienced home buyers can benefit from in an easy-to-understand and entertaining way that even first-time borrowers will be able to grasp. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending news, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. A recent article from the website continues to provide borrowers with information that can help them take full advantage of homeownership by providing an easy to understand guide on real estate second home tax deductions.
This new article from Loan Love titled, "Real Estate Second Home Tax Advantages In a Nutshell" starts by saying, "Congratulations! You've decided to take the plunge and buy that second home you've always dreamed about. Whether you are purchasing a long-awaited vacation home, seasonal residence or an investment property to bring in some additional income, there are some tax breaks coming your way that can help make ownership of a second home more affordable. The first thing to keep in mind about tax breaks for a second home is that different tax rules will apply depending on how you use your property:
- personal use;
- rental income; or
- combination of the two."
Loan Love goes on to explain the different second home tax deduction rules that apply to each of these different home use categories. First up are the rules regarding second homes as residences. The article says, "Did you purchase a new vacation home, a condo at your favorite vacation spot or a house in Florida to escape the worst of the winter weather? As long as you aren't using your real estate as a rental, you can deduct mortgage interest at tax time just like you do your primary residence, up to $1.1 million of debt across both homes combined. Like other real estate, you can also deduct your property taxes on your second home, although you won't be able to write off expenses like utilities or upkeep unless you can show the property includes an office devoted to your business."
The article then explains that tax deduction rules for rentals are a bit more complex. It states that how taxes are deducted depends on how many days out of the year the home is either rented out or lived in by the owners. If the owners use the residence for 14 days or more out of the year, the home will be considered a second residence; however, if the home is rented out for more than fourteen days, owners will need to report rental income. The article explains more on the implications of this, and also some strategies that home owners use to get the most out of the situation come tax time. The article ends by saying,
"Keep in mind, however, you can't have it both ways. If you are going to restrict your personal use in order to take the above-mentioned deduction, you won't be able to take the write-offs for the portion of mortgage interest that can't be applied as either a rental or personal-residence expense. There are other limitations. Real estate losses are considered "passive losses" by tax law, meaning they usually are not deductible. But, if your adjusted gross income is less than $100,000, you can deduct up to $25,000 in losses each year to offset other income, such as your salary. If your income tips over the $100,000 mark, that $25,000 allowance evaporates. You can, however, store passive losses and use them later on to offset taxable profit when you eventually sell that second home."
For more information on this subject, click here to view the full guide at LoanLove.com.
Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, firstname.lastname@example.org
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