lima branch
711 Dean Ave., Lima, OH 45804
Tel: 419.222.2001
Fax: 419.222.1570
Bluffton Branch
113 N. Main St., OH 45817
Tel: 419.369.9001
Fax: 419.369.1570

Your Home & Taxes


Financial transactions involving your home have great tax and financial implications to taxpayers and their families and should be approached with a well-informed understanding of the process. This section includes a variety of self-help tools to assist clients with various aspects of the process. If additional assistance is needed, please call for an appointment or a telephone consultation.

Mortgage Insurance Premium Deduction
Thursday, June 25, 2015

Qualified mortgage insurance premiums are deductible as qualified residence interest if the amounts: (1) are paid or accrued before Jan. 1, 2012; (2) aren't properly allocable to any period after Dec. 31, 2011; and (3) are paid or accrued with respect to a mortgage insurance contract issued after Dec. 31,...

Home Tax Deductions
Thursday, June 25, 2015

Many taxpayers have misconceptions about what expenses of owning a home or a second home are deductible for tax purposes. To make the issue more complicated, the deductible items may be currently deductible or deductible at the time the property is sold. In addition, your deductions must generally be itemized...

The Downside of Adding Your Child's Name to the Deed
Thursday, June 25, 2015

Many parents, especially the older ones, assume it is wise to add a child's name to their house deed in case something should happen to them. On the contrary, it is probably the worst thing that can be done. By doing so, the parent creates a host of problems.

Gift...

Traps to Watch for When Helping Children Purchase a Home
Thursday, June 25, 2015

Frequently, parents (and possibly grandparents) help their children (grandchildren) with the purchase of a home. This can happen, for instance, if the children have income too low to qualify for a loan or have a credit record that precludes them from getting a loan at all. The parents initially make...

Transform Nondeductible Interest to Deductible Interest
Thursday, June 25, 2015

The only interest that is deductible as an itemized deduction is home mortgage interest and investment interest. If you are like so many others with large consumer debt such as credit cards, car payments etc., you are paying interest that is not deductible. If the amount of consumer interest you...

Tips for Homebuyers
Thursday, June 25, 2015

If you're considering buying a home, here's a checklist of some of the things you should be on the lookout for:

Check your credit rating – Before applying for a loan, pre-check your credit rating to make sure there are no surprises. The advantage of the pre-check is that it...

Selling Two Homes on Joint Return
Thursday, June 25, 2015

When a married couple sells a jointly-owned home that has been owned and used as their primary home for two of the prior five years, they can exclude up to $500,000 of gain from the sale of the home. They can only do this once every two years, except under...

Selling Land That is Part of Your Home
Thursday, June 25, 2015

If a taxpayer sells the land on which their main home is located but not the home itself, the taxpayer generally cannot exclude the gain from the sale of the land with one exception. The exclusion would apply to the sale or exchange of vacant land that the taxpayer owned...

Renting Part of a Property
Thursday, June 25, 2015

If you rent part of your property, such as a room or a portion of the house, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces...

Selling a Home with a Home Office can be a Tax Trap
Thursday, June 25, 2015

These days, more individuals are working from home offices and availing themselves of the "Home Office Deduction." For tax purposes, this deduction essentially divides your home into two separate pieces of property, your home and business property. Those taking the deduction will be able to deduct a portion of the...

Sale of a Home Used for Business
Thursday, June 25, 2015

Depreciation: The tax law assumes business assets will decline in value due to obsolescence and wear and tear. Therefore, taxpayers are allowed to take an annual deduction called depreciation, which represents the decline in value. If the asset is later sold for more than its depreciated value, any gain attributable...

Refinanced Mortgage Interest May Not All Be Deductible
Thursday, June 25, 2015

Over the past few years, mortgage interest rates have dropped significantly and homeowners in increasing numbers are refinancing their home mortgages and in the process, have extended the term of the loan and are frequently taking additional cash out to pay down other debts, finance education, buy a car, etc....

Should You Refinance?
Thursday, June 25, 2015

There are a number of reasons to consider refinancing: lower payments, lower interest rates, eliminating PMI payments, home improvements, college funds, consolidating debt, purchasing a second home, or even financing a business venture.

When considering such a move, remember there are costs associated with refinancing and any decision to refinance...

Reduced Exclusion
Thursday, June 25, 2015

If a taxpayer does not qualify for the full home sale gain exclusion, they may still qualify to exclude a reduced amount if the taxpayer(s) did not meet the ownership and use tests, or the exclusion was disallowed because of the once every 2-year rule, but sold the home due...

Want to Get Rid of that Monthly PMI Payment?
Thursday, June 25, 2015

When a home purchaser's down payment is less than 20% of the purchase price, they must obtain Private Mortgage Insurance in order to get a loan. This is about one in every three new loans. Getting rid of the Private Mortgage Insurance will save you considerable money, but it is...

Mortgage Balance Has No Bearing on Sale Profit
Thursday, June 25, 2015

If you have ever refinanced real property such as a rental, vacant land, or even your home, and the new loan is for more than the balance of the old loan, you have essentially taken out a portion of the profits without actually selling the property. That means when you...

More than One Home
Thursday, June 25, 2015

If a taxpayer has more than one home, the taxpayer can only exclude gain from the sale of the taxpayer's main home (principal residence), even if the other home meets the 2-out-of-5-years ownership and use tests. Main Home: The property that the taxpayer uses the majority of the time during a...

Home Sale Exclusion and Irrevocable Trusts
Monday, June 22, 2015

Some taxpayers use revocable trusts as an alternative to having their property transferred by will. While there is no income or estate tax advantage to a revocable trust, there is a benefit in having the property pass to beneficiaries on the death of the owner without having to go through...

Are you Keeping an Eye on Interest Rates?
Monday, June 22, 2015

If you have a mortgage on your real estate property, you should be keeping an eye on interest rates.  Rates have been down over the last year or so.  This may provide you with a favorable opportunity to refinance your property.

The decision to refinance may not be solely predicated...

Will the Interest from a Refinanced Mortgage be Deductible?
Monday, June 22, 2015

If you are planning on refinancing your home, you might be concerned about whether the interest on the loan is deductible. Here's an overview of the current home mortgage interest deduction rules that should help answer your questions.

Interest on your new loan will be 100% deductible if interest on...

Tax Break for Sales of Inherited Homes
Monday, June 22, 2015

Heirs of property are often concerned about the taxes they will owe on any gain from that property's sale. After all, the property may have been purchased by a deceased relative years ago at low cost, but now has vastly appreciated in value. The usual question is: "Won't the taxes...

Co-Owners Eligible for Home Sale Exclusion
Monday, June 22, 2015

Most often, examples demonstrating exclusion of home sale gain are applied to single individuals or married couples. This gives the false impression that the $250,000 ($500,000 for married couples) exclusion applies to the home itself. Quite the contrary - the $250,000 exclusion is available to each individual who qualifies under...

Home Equity Can Provide Funds for Children's Education
Monday, June 22, 2015

Many parents of college age children would like to utilize the equity in their home to help pay for college expenses. When considering this course of action, there are two issues: (1) Should the first trust deed be refinanced or should a second trust deed line of credit be secured?...

Holding Title to Your Home
Monday, June 22, 2015

If you're thinking of purchasing a home, have you considered how you intend to hold title to the property? Surprisingly, many home purchasers don't give much attention to the question even though the manner in which title is held can have far-reaching ramifications.

The best way to come to a...

Fun and Fortune for Fixer-Uppers
Monday, June 22, 2015

Most individuals go shopping for their dream home rather than a fixer-upper when they are looking for a place to call home. However, if you are handy, willing and able to buy a home with the intention of fixing it up and reselling it, you have a unique opportunity for...

Using IRA Funds to Buy a Home
Monday, June 22, 2015

Using IRA Funds to Buy a Home

CAUTION: The term “first-time homebuyer” is used both in the context of the penalty-free IRA withdrawal discussed in the article and the first-time homebuyer credit article.  Be careful in that the definition of a first-time homebuyer is different for both.

Each taxpayer who...

Exclusion of Gain from a Taxpayer's Main Home
Monday, June 22, 2015

Unless they meet the reduced exclusion qualifications, taxpayers must meet the ownership and use tests in order to qualify for exclusion of gain. This means that during the 5-year period ending on the date of the sale, taxpayers must have:

1) Owned the home for at least 2 years (if...

Beware of Capital Gains From Previous House Sales
Monday, June 22, 2015

Unless the taxpayer qualified for the over age 55 exclusion, profits from home sales prior to May of 1997 were generally deferred into the replacement home. This, in effect, reduced the tax basis of the replacement home, so that when it is sold, the profit from the previous home is...

A New Twist for Home Sales – Non-Qualified Use
Monday, June 22, 2015

With the advent of the home sale gain exclusion back in the 1990s, taxpayers have been using that provision of the law in a popular strategy to exclude gain not just from their primary residence but also from rentals and second homes as well.

They do that by moving into...

Tax Credit to Aid First-Time Homebuyers
Monday, June 22, 2015

First-time homebuyers may wish to take advantage of a new tax credit included in the Housing and Economic Recovery Act of 2008.

Available for a limited time only, the credit:

Applies to home purchases after April 8, 2008, and before July 1, 2009. Reduces a taxpayer’s tax bill or increases...

Going Green At Home Has Tax Benefits
Monday, June 22, 2015

A reduced credit for home energy-savings improvements is available for 2011. The credit generally equals 10% of a homeowner's cost of eligible energy-saving improvements, up to a maximum lifetime tax credit of $500. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass...