Wednesday, September 30, 2009

Home Buying Tax Benefits

They say that there are only two things you can count on in this world death and taxes. However, when it comes to owning a New York condominium home, it appears there may be a third thing also and that is the favorable treatment of New York condominium home ownership by the Internal Revenue Service. While purchasing your own New York condominium home most of the expenses are not tax deductible. Nevertheless there is one exception; The IRS says you can deduct interest in the year that it is paid, and that is usually part of each monthly loan payment.
Remember that if the day you purchase is on any day other than the first of the month, you will likely pay a charge for daily interest between the day of closing and the end of the month. Much more importantly, in most cases, loan discount points and origination fees are tax deductible to the buyer, regardless of who pays them. Look at lines 801 and 802 of your settlement statement and see if you hit the jackpot. This is a particularly unusual deduction because you get the benefit even if the seller paid your closing costs. Because origination fees of 1% and more are common, this can amount to much cash.


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