VIEWS: 6 PAGES: 18 POSTED ON: 5/19/2012
Taxes Real estate taxes are ad valorem Ad valorem means: According to Value • Why Taxes? • Who is exempt? • How taxes are computed? • How we file a tax appeal? • Equalization factor Exempt from Property Taxes • Public Schools • Churches • Charitable Organizations • Cemeteries • Grave yards • Non Profit hospitals • Government Agencies Taxes • Special Tax reductions for –Seniors –Veterans- Widow of same –Farmland owners –Disabled persons • Tax Sale • Assessed value – Market value? Tax math Problem • Market value of property is $292,300. the applicable assessment ratio is 85%. If the tax rate is $2.15 per hundred dollars of assessed valuation, what will the annual taxes of the homeowner be? More • Tax Foreclosure Sale • Married couple exemption: $500,000 • Single persons $250,000 • Up to $10,000 from IRA as down payment for first time home buyers Sellers Net problem • The seller wants to net $50,000 from the sale of her home after paying: $126,000 Mtg, $1,560 in repairs, closing costs of $2,015 and paying the broker a 7% commission. • Question: How much should the home sell for? The Gain on the sale The difference between the amount realized and the basis i.e. Buy home for $90,000; closing costs $500 basis: $90,000 Add Landscaping and fencing for $3500 “ $94000 Remodel Kitchen for $15,000 “ $109,000 Sell home for $125,000; sales comm and c.costs $8000 Amount realized $117,000 Calculation of gain: Amt realized. less basis $109,000 = Gain $8,000 Interest • All interest deductible on purchase of primary and or second home up to $1 Million. • Real Estate property taxes are deductible • Both of above even more attractive to those in high Tax brackets There are income tax savings for those that invest in income producing properties. (Depreciation) Tax credits can help to lower federal income taxes ie repair of Historical homes, buying and repairing low income housing and buying credits from your stock broker.. Note: all must qualify by IRS standards Tax Credits for 1st time real estate buyers New Tax credit for 1st time home buyers is: $8000. A tax credit is dollar for dollar reduction is what ever a tax payer owes on his tax return. A deduction is subtracted from the amount of income that is taxed. Credits are worth more than deductions Credit must not exceed 10% of purchase price of the home. Limits on Gross income apply (married/single) If residing in home for at least 36 Mos. None of above amount needs to be paid back. Credit can be claimed on either 08 or 09 return. Depends on which year is beneficial. Deductions and Tax Credits The tax code allows for certain expenses to be deducted from income . Ie A Business loses money, the owner may deduct the loss. On the other hand a tax credits are subtracted, dollar for dollar, from the amount owed. IE if Tax return shows $7500 Taxes owed…The credit is taken from this amount and the tax payer then owes no taxes.
Pages to are hidden for
"Taxes"Please download to view full document