Tips for Tax-Savvy Homeowners

During tax season, homeowners are eligible for several deductions. Sellers who claim a home-office deduction can omit up to $250,000 in capital gains for a single homeowner or $500,000 for a couple, but must pay capital gains taxes on the amount deducted. Sellers deducting a home office must also be mindful of the office location. Converting a guest house or detached garage into an office results in homeowners paying for profits allocated to the office; relocating the office indoors two years before a re-sale is a better strategy for maximizing deductions. Tax advisers say claiming 30 percent to 40 percent of a home is too high of a deduction and could be a flag for the IRS. Additionally, two single people that co-own a home can deduct interest on $11 million of the mortgage debt. | Read More