Tax questions by everyhomeowners should ask &

should know about.

Before you belly up to the nearest bar or start pulling your hair out,here are some commonly asked questions about taxes andhomeownership. Knowing these answers will help keep your tax bill aslow as possible.

No. 1: How much of my mortgage payment is tax deductible?

Interest on debt used to buy, build or improve your primary or secondhome (called acquisition debt), as long as mortgages totaled $1 millionor less ($500,000 if single or married filing separately)Mortgage insurance (or funding fees for government loans) for loanstaken after 2006 as long as your adjusted gross income does notexceed $100,000 for a married couple (half that for singles and thosemarried filing separately)Property taxes on first and second homes (if you itemize yourdeductions)

No. 2: I sold my home this year. Will I owe capital gains tax?

As long as the property was your principal residence for at least two ofthe last five years, you can exclude $250,000 of your profit ($500,000for married couples) from your federal taxable income. If you profitedless than the $250,000/$500,000 threshold, no extra form is required.You can do this as often as every two years.

No. 3: I lost money on the sale of my home. Do I get todeduct the loss?

Loss on the sale of a personal residence is treated like a loss on thesale of any personal property. It is not deductible. Losses oninvestment properties are deductible.

No. 4: Are my closing costs tax deductible?

You can claim a deduction for real estate taxes you paid as part of yourmortgage closing costs. The same goes for prepaid interest. It will beincluded on the 1098 form your lender sends you.

No. 5: What happens with points on a refinance?

This deduction is often overlooked, and it could be worth a lot. Whenyou pay points on a refinance, they have to be prorated.

No. 6: Does a mortgage modification affect my taxes?

If you modify your mortgage, one consequence might be that you payso much less interest that you will save more by choosing the standarddeduction rather than itemizing. Don't just assume that itemizing isalways best because you did it in the past.

No. 7: Can I deduct prepayment penalties?

Prepayment penalties paid on a mortgage are tax deductible in the yearthat they are paid.

No. 8: What expenses am I NOT allowed to deduct from myincome?

Unless your property is a rental or investment, you don't get tax breaksfor the following:

Hazard insuranceHomeowners association duesPrincipal paymentsGeneral closing costs like appraisal fees or title insuranceLocal assessments to improve your neighborhood

No. 9: Does my income affect my tax deductions?

The IRS has increased the maximum adjusted gross income that filerscan have for 2015 and still fully itemize deductions -- good news forwealthy homeowners who want to claim things like the mortgage-interest tax break.Smart homeowners will do the math to see which works out better forthem -- itemizing or taking the standard deduction.

THANK YOU!!