Low Cost Property

Writing Off a Home Loss When Turning a Residence Into a Rental

AUTHOR: About.com Home Buying / Selling

5.03.2010

Since so many sellers are taking a financial hit to sell in our soft real estate market, it really adds insult to injury if a seller can’t write off that home loss come tax time.

Yet, our current IRS tax code is pretty explicit regarding how it handles the sale of a personal residence. As long as you’ve lived in the home for two out of the past five years, you will not pay taxes on $250,000 of capital gains ($500,000, if married) upon sale. That pertains to profit, though, not a loss.

If you’ve suffered a loss on the sale of your home, you’re not ordinarily entitled to deduct any of that loss from your taxes.

However, it made me wonder if there was a tax loophole. Suppose, for example, that you’ve converted that home into a rental? Would that provide a way to deduct a loss upon sale? To get an answer to that scenario, I turned to Julian Block, a tax lawyer from Larchmont, New York

. . . read more about home sale losses.

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Writing Off a Home Loss When Turning a Residence Into a Rental originally appeared on About.com Home Buying / Selling on Friday, March 5th, 2010 at 05:00:11.

Advertising Words for Home Selling

AUTHOR: About.com Home Buying / Selling

3.03.2010

Before you place an ad in the newspaper to sell your home or post an online listing, stop to think about the advertising words you choose.

Choosing the wrong advertising words can cost you a buyer, but even more important, choosing the wrong advertising words can result in a fine of $10,000 or more. Many people are unaware of which advertising words constitute discrimination and violate the Fair Housing Act.

The popular online classified site, Craigslist, was sued a while back by a group of lawyers for allowing discriminatory housing ads on its site. Now, you may not agree with the Fair Housing Act, but nonetheless, it is the law, and seven classes are protected. I receive a lot of mail from readers who can’t understand why they are not allowed to advertise that a home is located near a church, for example

. . . read more about advertising words.

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Advertising Words for Home Selling originally appeared on About.com Home Buying / Selling on Wednesday, March 3rd, 2010 at 05:00:24.

Removing Assets From Homes in Foreclosure

AUTHOR: About.com Home Buying / Selling

26.02.2010

A seldom-discussed issue concerning homes that are in foreclosure is the rising practice of removing assets from foreclosures.

Many home owners do not understand what constitutes a fixture in the home and, as such, a fixture must remain in the home. Some sellers are so desperate for money that they rip out the wiring in the home and sell it for scrap. Owners in foreclosure rarely stop to think they are committing a crime when they remove ceiling fans or sell the built-in dishwasher.

Still, others don’t blink twice when they pick up a can of spay paint and begin decorating the walls and windows with graffiti. I suppose they figure they are “sticking it to the man” when they deface a home, but it makes me wonder what goes through their heads. How can they destroy a home that once held warm memories as a place to raise their family? Moreover, how can they possibly think there will be no ramifications for vandalizing a home that will soon belong to the bank?

The truth is the bank isn’t overly concerned about the condition of a foreclosed home because the next buyer will deal with fixing it up. Banks aren’t in the business of restoring stripped homes, but they, along with an entity that may astonish you, DO hold the power to prosecute

. . . read more about Removing Assets From Foreclosures.

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Removing Assets From Homes in Foreclosure originally appeared on About.com Home Buying / Selling on Friday, February 26th, 2010 at 05:00:02.

Ways to Stop a Foreclosure Before It’s Too Late

AUTHOR: About.com Home Buying / Selling

24.02.2010

The best way to stop foreclosure is to make up your back payments before the bank forecloses.

But not all home owners realize that foreclosure is pending when they miss making a payment or two. By the time they realize that foreclosure is imminent, many sellers throw in the towel and do nothing. Some become depressed and stop making payments to any creditor, feeling like their only choice at this point is to file for bankruptcy protection. But even as credit card bills pile up, there are still ways to stop the foreclosure from happening.

The first thing home sellers facing foreclosure should do is make out a list of all debts — including an itemization of principal balances and payment amounts — and then list all available assets, resources and present income potential. This analysis will give home owners a clear picture of their financial status

. . . read more about ways to Stop Foreclosure.

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Ways to Stop a Foreclosure Before It’s Too Late originally appeared on About.com Home Buying / Selling on Wednesday, February 24th, 2010 at 05:00:15.