Accounting

Home ownership is one of the major decisions that a tax payer my need to make in hisher investment plans.  The homeowner may get about three tax benefits.  These include, interests on mortgages may be deductible, taxes on real estates may also be deductible, and tax exclusions are gained on the resident capital resident. The cost of owning a home is reduced up on the reception of the tax gains mentioned.  The law provides for such exclusive benefit each of which has a certain percentage of deduction for example, tax deduction on real estates is estimated to 24.6B, while the deductions on mortgage interest is estimated to 67.0B and capital benefit exclusions are 16.8B as agreed in the taxation committee of 2008.  These estimations favor the majority of homeowners (Michael, 19). The law on taxation allows homeowners to recalculate their taxable income and generate workable plans for housing investments.

Also, they take away allocable interest on equity loan for homes by up to 100,000. Additionally, tax payers may reduce equity loan interests which are non-home, from the AMT income tax.  In addition, homes occupied by owners may gain some deduction on the tax for real estates after homeowners have itemized them.  Although there are some limits on the exclusions on the capital tax benefits from a principal residence sales, this depends on the kind or type of homeowner married or single.

According to the homeownership law, people buying homes form parties that are not related to them before 1st may ,2010, and who did not own a principal residence within the previous three year duration that ended on the purchase date ,if they bought it at a fair market price may claim a 10 refundable tax on the buying price. This rule governs homeowners at their first time purchase of a home. There are also some clauses that govern the militia or citizen that have been out of the country for more than 90 days during January 2009 and April 2010. These may claim credit for home ownership (John, 14).

However, in the cases where the homes were bought before 7th November 2009, the credit value is reduced considerably depending on the AGI standards.  For home bought after 6th November 2009, there is no claim for ownership credit. This is only eligible if the buying price is greater than 800,000, or if it is bought by someone who can eligibly be an accepted dependant to other taxpayers and also for buyers aged less than 18 years unless heshe is married to a spouse whose age is more than 18 years.

If one is making hisher credit claim in 20092010, they should attach their settlement statement to the return that shows the completion of purchase payments.  Moreover, for homes already sold for over 36 months, any extension on credit is mandatory to repayment unless otherwise exceptional.  If the home was purchased in 2009 or 2010, persons may lay credit claims on the years purchase returns.   In addition, those who do not itemize their property can claim up to a 500 or 1000 for joint return, tax on state or real property (Solomon, 25).

Finally, after all tax deductions and numerous claims, you may get carried away and forget to clam for loan deduction on the origination fees that is considered in terms of points in which case one point is equivalent to 1 of the loan. These must be deducted depending on the year they are paid. These claims relieve taxpayers of their burden hence benefiting them.