What are the deducations associated with buying a home in 2008

[truebluemd]

What is the name of your state (only U.S. law)? MD

What are the deductions that I can apply to my tax filing if I bought my home in 2008

 

[LdiJ]

What is the name of your state (only U.S. law)? MD

What are the deductions that I can apply to my tax filing if I bought my home in 2008

Did you own a home anytime in the three years prior to the purchase? If you did, your home may not do you any good for 2008. Because the standard deductions keep getting higher and the interest rates are still fairly low, much of the time your house doesn't start helping you until the second year, when you have a full year's worth of interest.

You can however claim an extra standard deduction for property taxes up to 500.00 for a single person and 1000.00 for a married couple. That is new this year.

If you did NOT own a home anytime in the 3 years prior to the purchase, you would be eligible for the first time homeowners credit.

 

[truebluemd]

Did you own a home anytime in the three years prior to the purchase? If you did, your home may not do you any good for 2008. Because the standard deductions keep getting higher and the interest rates are still fairly low, much of the time your house doesn't start helping you until the second year, when you have a full year's worth of interest.

No this is my first home. I have a full year as i purchased in jan 08.

You can however claim an extra standard deduction for property taxes up to 500.00 for a single person and 1000.00 for a married couple. That is new this year.

Where would we apply this. I used turbotax and they only asked for the years property taxes paid, nothin extra

If you did NOT own a home anytime in the 3 years prior to the purchase, you would be eligible for the first time homeowners credit.

If your talking about that new thing that just started, i don think i can cause I bought before April 8 2008, and still, the deduction wouldnt have been very much for me.

 

[LdiJ]

No this is my first home. I have a full year as i purchased in jan 08.



Where would we apply this. I used turbotax and they only asked for the years property taxes paid, nothin extra



If your talking about that new thing that just started, i don think i can cause I bought before April 8 2008, and still, the deduction wouldnt have been very much for me.

Since you have owned your house for a full year, if your mortgage interest, plus property taxes, plus state tax withheld, plus personal property taxes, plus any charitable donations (ie tithing to your church) add up to more than your standard deduction, then you may itemize expenses instead of taking the standard deduction.

 

[thedoctorisin]

It's been a while since I bought a house, but I remember having to going over the Settlement Statement looking for amounts related to mortgage interest and property taxes. For example, the interest to the end of the month was there, and we had some points that were fully deductible as interest in the first year. Also, we had to reimburse the prior owner for property taxes that he had already paid.

 

[truebluemd]

My 1098 shows a box two with the amount of points paid for the purchase of the home. Do I ad that too? Plus I was told that we could deduct some of the closing costs. Is this true as well?

 

[thedoctorisin]

My 1098 shows a box two with the amount of points paid for the purchase of the home. Do I ad that too? Plus I was told that we could deduct some of the closing costs. Is this true as well?

You need to check to see if the points meet all the requirements to deduct them this year. The following IRS publication contains the requirements, as well as a list of which closing costs are deductible. Note that some closing costs which are not deductible can still be used to increase the cost basis of your house.

Publication 530 (2008), Tax Information for Homeowners

 

[LdiJ]

My 1098 shows a box two with the amount of points paid for the purchase of the home. Do I ad that too? Plus I was told that we could deduct some of the closing costs. Is this true as well?

Yes, points on an original mortgage are deductible in full. The only closing costs that are deductible are mortgage interest, points and property taxes. However, any mortgage interest, property taxes and points will show up on your 1098.

All other closing costs get added to your basis, therefore reducing your potential capital gain, later on down the road, if you sell.

 

[truebluemd]

Thanks so much LD