Tax Advantages of Home Ownership: Part Three

Save those receipts, you’ll be happy you did.

by Myles Biggs

Many home owners consider home improvements to be a sunk cost and simply throw away receipts for things like landscaping, energy efficient systems, storm windows, etc. This can be a costly mistake. While you can’t deduct these expenses on an annual basis, when it comes time to sell your home these home improvements can be added to the purchase price of your home in order to determine your total tax bill.

As discussed in part two of this series, when selling a home a married couple can shelter up to $500,000 of their home sale profit from taxes. Should profits from a sale be in excess of that $500,000, those home improvement receipts will come in handy, especially if significant home improvements have been made. By adding the total cost of home improvements to the total cost of your home, you may be able bring your total profit back under the tax exempt $500,000 mark.

If you are interested in becoming a home owner and gaining these tax advantages, be sure and contact us to get in touch with the Ritz-Craft modular home builder nearest you.