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Can I Deduct Real Estate Taxes In Ny From More Than One Home On My Federal Tax Return?
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I bought a new house and havent sold the first one yet? Can i deduct mortgage interest from both? What about real estate taxes? Both houses are in NY city.
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May 22nd, 2009 at 5:15 pm
You can deduct state, local, and foreign real estate taxes on ALL real estate you own.
You can deduct mortgage interest on ANY two homes you own. You can only deduct mortgage interest on the first $1 million (total) of loans used to buy, build, or improve your home and only on the first $100,000 of other mortgage loans (home-equity). If you think you may be over these amounts, or if you want to investigate further, I suggest reading the attached publication from the IRS.
May 22nd, 2009 at 11:34 pm
The answer is yes to both. I found this directly on the IRS website: http://www.irs.gov
However, your mortgage interest deduction may be limited if your indebtedness is over $1,000,000
Is the mortgage interest and property tax on a second residence deductible?
The mortgage interest on a second home which you use as a residence for some portion of the taxable year, is generally deductible if the interest satisfies the same requirements for deductibility as interest on a primary residence. Real estate taxes paid on your primary and second residence are, generally, deductible. Deductible real estate taxes include any state, local, or foreign taxes on real property levied for the general public welfare. Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property.
Usually, you can deduct the entire part of your payment that is for mortgage interest, if you itemize your deductions on Schedule A (Form 1040). However, your deduction may be limited if:
Your total mortgage balance is more than $1 million ($500,000 if married filing separately), or
You took out a mortgage for reasons other than to buy, build, or improve your home.
May 23rd, 2009 at 4:33 am
yes
May 23rd, 2009 at 6:44 am
Your closing costs- including real estate taxes can be deducted for your new home which I assume you are living in. The other home, you can deduct also but only up until moving out- you can only deduct one place of residence, unless you are renting out the other home while waiting to sell it, and you would deduct the cost of the mortgage and taxes, etc. from the rent you would be receiving.
May 23rd, 2009 at 12:09 pm
There are no cows more sacred in the tax code than the deductions for mortgage interest and property taxes. If you own more than one home and you collect rental revenue, there are lucrative tax breaks you can take advantage of. In addition to the mortgage interest and taxes, any money spent on the property is deductible. If you buy a new refrigerator, if you make any repairs–that money is deductible.” With multiple rental properties, such deductions can be huge. “When you’re talking about 5% to 6% [interest payments] on a mortgage for a $300,000 home, that already gets you into tens of thousands eligible for deduction.
There is a limit to how much of that money can be deducted under federal guidelines. Only $25,000 of money spent on a property is deductible for homeowners with an adjusted gross income under $100,000, but the balance of those expenses can be earned into the next year. For homeowners with an adjusted gross income of more than $100,000, the deduction rate shrinks and is limited to 50 cents for every dollar over $100,000, up to $25,000 a year. So, for example, someone who made $120,000 last year and poured $50,000 into improving or repairing an investment property would only be allowed to deduct $10,000–half the amount of their salary over the $100,000 mark.