As part of the recent tax reform, the Tax Cuts and Jobs Act of 2017, the deduction for home mortgage interest and property taxes has undergone substantial alterations. These changes will impact most homeowners who itemize their deductions each year.
If you use independent contractors to perform services for your business or your rental that is a trade or business, for each individual whom you pay $600 or more for the year, you are required to issue the service provider and the IRS a Form 1099-MISC after the end of the year, to avoid losing the deduction for their labor and expenses. (This requirement generally does not apply to payments made to a corporation. However, the exception does not extend to payments made for attorney fees and for certain payments for medical or health care services.)
If you have a second home in a resort area, or if you have been considering acquiring a second home or vacation home, you may have questions about how rental income is taxed for a part-time vacation-home rental.
With the advent of online sites such as Airbnb, VRBO, and HomeAway, many individuals have taken to renting out their first or second home through these online rental sites, which match property owners with prospective renters. If you are doing that or are planning to do so, there some special tax rules you need to know.
Article by Katie Lobosko | Found on CNN.com
College grads have claimed for years that they were putting off buying a home because of student debt. Now, there’s strong proof that their loans really have pulled down homeownership rates.
About 32% of those in their 20s owned a home in 2007, but that’s fallen drastically to 21% in 2016.
While the poor labor market and memories of the housing bubble certainly played a role, student debt can explain up to 35% of the decline, according to a report from the Federal Reserve Bank of New York released Thursday. Read more
Article by Ilana Polyak | Featured on Journal of Accountancy
Home is where the heart is. And it can also be where the assets are. As of 2011, home equity made up about three-quarters of the average American’s net worth, according to the U.S. Census Bureau. Despite this high figure, the home doesn’t always factor into retirement planning calculations.
For clients with ample assets, home equity is a less pressing issue. In that case, there’s no reason to “concern yourself with the house,” said David Imhoff, CPA/PFS, owner of Cornerstone Wealth Advisors LLC in Overland Park, Kan., because “we look at the house as the asset of last resort.”
But retirees of more modest means may need every possible option, including home equity. “It’s really surprising that more people don’t pay attention to it,” said Geoff Sanzenbacher, Ph.D., research economist at the Center for Retirement Research at Boston College. “The house can be a potential source of wealth.” Read more
Article by JOANNE KAUFMAN | Found on New York Times
When Aaron Thornton and his wife, Michelle League, decided a few months ago to sell their brownstone on West 120th Street, they first tended to some maintenance issues, then consulted their calendar to figure out the best time to put the property on the market.
They knew, of course, that the last chunk of the year would be one long stretch of turkey and tinsel with prospective buyers more likely to be shopping for Christmas gifts than real estate. Nonetheless, the couple wasn’t inclined to delay; the house went on the market in the middle of December.
“Our attitude,” Mr. Thornton said, “was: no time like the present.”
Article by Kathryn Vasel | Featured on CNN Money
The government’s crackdown on anonymous real estate buyers hiding behind shell companies seems to be working.
In January, the Treasury Department announced a temporary initiative that requires title insurance companies to identify all-cash buyers of certain high-end real estate in Manhattan and Miami.
Now, it’s expanding the order into other markets in New York City, Florida, California and Texas.
The rule will soon apply in all New York City boroughs, San Diego County, Los Angeles County, three counties in the San Francisco area and two counties directly north of Miami (Broward and Palm Beach).
It’s also expanding into Bexas County, in Texas, which includes San Antonio.
Article Featured on LA Times
Fewer Americans bought homes in October, a sign that rising home values may be pushing more would-be buyers to the real estate market’s sidelines.
The National Assn. of Realtors said Monday that sales of existing homes fell 3.4% last month to a seasonally adjusted annual rate of 5.36 million.
The decline comes after strong growth in home-buying for much of 2015, bolstered by steady job gains and low mortgage rates. Home purchases have advanced 3.9% from a year ago, even as buyers have fewer choices because the number of listings on the market has dropped 4.5%.
But last month suggested the start of a reflexive backlash after the strong gains in home-buying. The additional sales have spawned sharp price increases that have outpaced wage growth and left some would-be buyers out of the market.
The October sales decrease indicates “the market is treading water,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Yet other economists anticipate sales growth to return because of the underlying health of the broader economy.