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| *Loan,banking and credit>>>income tax |
Can 2 people claim a house on their income taxes if they are not married but joint owners? |
My friend and I bought a house this year. Now I am stumped as to what to do for income tax time. Can both of us file for the house on our income taxes or just one of us? What about the improvements we have done such as a new kitchen and new bathrooms and baseboards etc. Can that be claimed on income taxes as well? Someone please help!! Improvements are not deductible as such. They are added to the cost when dewtermining your 'tax basis' in the house. This is important in determining any captial gain when the home is sold. Under current rules, you can exculde up to $250,000 of gain when selling a home that was you primary residence for 2 of the last 5 years. Interest and property taxes can be split as long as both names are on the loan and the deed. You must be legally obligated to pay and actually pay these costs in order to claim the deductions on your tax return.You can only deduct mortgage interest, not improvements. And you can't "double-dip" .... only ONE can claim. Actually No. If you both did that your basically gettin double the amount and then in time they will find out and you'll have to pay it with your own money. You are asking several questions in one. Property taxes: You have to be on the deed to claim. If you are, you get to deduct whatever each of you paid. So if you are splitting bills down the middle and the tax is $2,000 you each get to deduct $1,000 Mortgage Interest: You have to be legally responsible for repaying the loan. If you are both on the Promissory Note (or whatever your state calls it) the same situation applies. Improvements: These are added to the basis of the house and are only relevant when you sell or if you are renting a room to someone else who is not on the deed or mortgage. They may also be relevant when your property gets re-appraised for property taxes. You must be able to itemize on Schedule A to take the mortgage interest or property tax deductions. For a single person that means your deductions must exceed $5,150. As well as those items, the other main ones are state income or sales taxes and charitable contributions. Work for a CPA doing taxes My humble recommendation (and I am new homeowner this year too): if you have now have become a homeowner after saving money for a downpayment, budgeting, and the like (or not?) don't you think it's wise at this point in your life to chalk over the 60-70 bucks it costs to use a CPA to do your taxes for you? |
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