Dear Michael: I am filing my tax returns for 2014. What can I claim as a tax deduction for the home I just purchased?
Answer: This is a question for your CPA or whoever does your taxes. I encourage you to follow up with a professional tax advisor as I am not qualified to give advice in two areas – legal matters and tax matters. Briefly put, providing you itemize deductions, own and occupy your home, you can deduct both property taxes paid on your home and interest paid on your mortgage. You can deduct the points and prepaid interest you made during the actual purchase. Get a copy of your closing statement as your tax preparer will need it. If you don’t have a copy, contact your escrow company or your real estate agent and they will email you a copy.
Dear Michael: My mom passed away and I am putting her house on the market. My Realtor wants me to get rid of most of her furniture and personal belongings that were accumulated over the years. Will getting rid of my mom’s belongings really help the sale?
Answer: Absolutely! It may be difficult for you to envision after so many years of living in the same home and being content with the surroundings how much more appealing the home will look with a complete makeover. Buyer’s first impression is critical. The market offers no room for second guessing. A fresh coat of paint, carpets cleaned, minimizing on furniture and clutter will go a long way. Make sure your property to stands out not only by pricing it right but also by making it attractive for buyers. Take your Realtor’s advice, he/she has the experience… Good luck!
Dear Michael: If I become the owner of a home property by a quick deed, am I responsible for any delinquent taxes?
Answer: The most common answer to that question is yes. Property taxes, mortgages, liens, and other encumbrances are tied directly to the property, not the person that owns it. For instance, the IRS has the right to place a tax lien on your property if you are delinquent on your taxes. That lien is then attached to the property. If you quit claim your home to your sibling, then the lien follows the property and your sibling will have to settle the tax lien. Never obtain a property without research. At the very least, check the taxing authority, water, sewer, and any other entity that may have the right to lien the property. There may also be judgments and other liens attached to the property that you cannot research on your own. These may not be judgments against you but they will become problematic when you attempt to sell or refinance. It is highly advisable that you have a title company do a complete title search on the property before you have it deeded to you.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: email@example.com.