CHAPTER 4

Your Home

Alert
At the time this book was printed, Congress had not extended numerous breaks for 2012 that had expired at the end of 2011. Check the online supplement in February 2013 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2012 returns.

Home ownership is part of the American dream. According to the U.S. Department of Housing and Urban Development, about 65.5% of Americans own their own homes in the second quarter of 2012. There are many reasons that we want to own rather than rent a home—for example, as a way to build up equity. But there are also sound tax reasons favoring home ownership. Certain expenses of home ownership are deductible. And when you sell your home, some or all of your profit may be tax free. If you had problems with your mortgage or lost your home to foreclosure, there may be special tax breaks for you.

This chapter explains:

  • Mortgages
  • Mortgage interest tax credit
  • Home equity loans
  • Points
  • Refinancing
  • Prepayment penalties
  • Late payment penalties
  • Mortgage insurance
  • Reverse mortgages
  • Cancellation of mortgage debt
  • Penalty-free IRA withdrawals for home-buying expenses
  • Homebuyer credit for DC purchasers
  • Real estate taxes
  • Cooperative housing
  • Minister's housing allowance
  • Home sale exclusion
  • Moving expenses
  • Energy improvements

Casualties and disasters that can befall your home, and the deductions you can claim for them, are explained in Chapter . The home office deduction for using a portion of your home for ...

Get J.K. Lasser's 1001 Deductions and Tax Breaks 2013: Your Complete Guide to Everything Deductible now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial