Okemo Mountain Second Home Tax Breaks
Okemo Mountain Second Home Tax Breaks
If you are in the market for a second home, congratulations! Not only is Okemo Mountain a great place to ski and relax, you also can garner some tax benefits. Here are some tax breaks as spelled out by Kiplinger.com:
Mortgage interest. If you use the place as a second home — rather than renting it out as a business property — interest on the mortgage is deductible just as interest on the mortgage on your first home is. You can write off 100% of the interest you pay on up to $1.1 million of debt secured by your first and second homes and used to acquire or improve the properties. (That’s a total of $1.1 million of debt, not $1.1 million on each home.) The rules that apply if you rent the place out are discussed later.
Property taxes. You can deduct property taxes on your second home, too. In fact, unlike the mortgage interest rule, you can deduct property taxes paid on any number of homes you own.
If you rent the home. Lots of second-home buyers rent their property part of the year to get others to help pay the bills. Very different tax rules apply depending on the breakdown between personal and rental use.
If you rent the place out for 14 or fewer days during the year, you can pocket the cash tax-free. Even if you’re charging $5,000 a week, the IRS doesn’t want to hear about it. The house is considered a personal residence, so you deduct mortgage interest and property taxes just as you do for your principal home.
Rent for more than 14 days, though, and you must report all rental income. You also get to deduct rental expenses, and that gets complicated because you need to allocate costs between the time the property is used for personal purposes and the time it is rented.
If you and your family use a beach house for 30 days during the year and it’s rented for 120 days, 80% (120 divided by 150) of your mortgage interest and property taxes, insurance premiums, utilities and other costs would be rental expenses. The entire amount you pay a property manager would be deductible, too. And you could claim depreciation deductions based on 80% of the value of the house. If a house is worth $200,000 (not counting the value of the land) and you’re depreciating 80%, a full year’s depreciation deduction would be $5,800.
You can always deduct expenses up to the level of rental income you report. But what if costs exceed what you take in? Whether a loss can shelter other income depends on two things: how much you use the property yourself and how high your income is.
If you use the place more than 14 days, or more than 10% of the number of days it is rented — whichever is more — it is considered a personal residence and the loss can’t be deducted. (But because it is a personal residence, the interest that doesn’t count as a rental expense — 20% in our example — can be deducted as a personal expense.)
If you limit personal use to 14 days or 10%, the vacation home is considered a business and up to $25,000 in losses might be deductible each year. That’s why lots of vacation homeowners hold down leisure use and spend lots of time “maintaining” the property. Fix-up days don’t count as personal use. The tax savings from the loss (up to $7,000 a year if you’re in the 28% tax bracket) help pay for the vacation home. Unfortunately, holding down personal use means forfeiting the write-off for the portion of mortgage interest that fails to qualify as either a rental or personal-residence expense.
We say such losses might be deductible because real estate losses are considered “passive losses” by the tax law. And, passive losses are generally not deductible. But, there’s an exception that might protect you. If your adjusted gross income (AGI) is less than $100,000, up to $25,000 of such losses can be deducted each year to offset income such as your salary. (AGI is basically income before subtracting your exemptions and deductions.) As income rises between $100,000 and $150,000, however, that $25,000 allowance disappears. Passive losses you can’t deduct can be stored up and used to offset taxable profit when you ultimately sell the vacation house.
Tax-free profit.Although the rule that allows home owners to take up to $500,000 of profit tax-free applies only to your principal residence, there is a way to extend the break to your second home: make it you principal residence before you sell. That’s not as wacky as it might sound.
Some retirees, for example, are selling the big family home and moving full time into what had been their vacation home. Once you live in that home for two years, up to $500,000 of profit can be tax free. (Any profit attributable to depreciation while you rented the place, though, would be taxable. Depreciation reduces your tax basis in the property and therefore increases profit dollar for dollar.)
But Congress is clamping down on this break for taxpayers who convert a second home into a principal residence after 2008. A portion of the gain on a subsequent sale of the home will be ineligible for the home-sale exclusion of up to $500,000, even if the seller meets the two-year ownership and use tests. The portion of the profit that’s subject to tax is based on the ratio of the time after 2008 when the house was a second home or a rental unit to the total time you owned it.
So if you have owned a vacation home for 18 years and make it your main residence in 2011 for two years before selling it, only 10% of the gain (two years of non-qualified second home use divided by 20 years of total ownership) is taxed. The rest qualifies for the exclusion of up to $500,000.
Learn more about Okemo Mountain second homes by visiting ISellVermontRealEstate.com or give me a call for more personal service.
Ludlow VT Real Estate: Regulatory Reform Expected With Obama Presidency
Ludlow VT Real Estate: Regulatory Reform Expected With Obama Presidency
The upcoming presidential transition comes at a time of great challenges within the housing industry and the economy at large. Consequently, many are wondering what a Barack Obama presidency will mean for real estate and housing issues.
National Association of Realtors analysts expect the Obama administration and the new Democratic-controlled Congress to focus on regulatory reform of the financial services industry, with potential changes to Fannie Mae and Freddie Mac.
This fall, Obama responded to Realtor® Magazine‘s questions about the mortgage crisis, sustainable development, housing affordability and other topics. Read the Obama interview.
Learn more about Ludlow VT real estate by visiting ISellVermontRealEstate.com.
Begin searching for Ludlow VT real estate and homes for sale.
Top 10 Events Impacting Ludlow Real Estate In 2008
Top 10 Events Impacting Ludlow Real Estate In 2008
As part of the annual Swanepoel TRENDS Report that is published every year during the first week of February, the research team wraps their four month study of the real estate industry by announcing the top 10 Newsmakers, Events and Trendsetters for the year.
The second list to be released is the top 10 events that during 2008 had the largest impact and influence on the real estate brokerage industry. Events are defined as those occurrences that transpired during the previous calendar year (2008) that made headlines and captured the attention of the real estate industry. The selection of these events was based upon their potential future impact on the industry rather than only their 2008 impact.
The Top 10 Events impacting Ludlow Real Estate for 2008 are:
1. The Bailout: September 17th
Most notably the one single event of the year was the announcement of the “Silver Bullet” designed to save the country from the subprime collapse itself and the failure/buyout of major Wall Street firms and national banks. Depending upon how effectively the Emergency Economic Stabilization Act’s $700 billion is going to be allocated and managed it may prove to be the beginning of the turning point in the current economic recession.
2. The Presidential Election
In one of the most competitive, contentious, divisive and yet historic political campaigns the country responded with the largest voter turnout in history to elect an African American, Barak Obama as president. The “I have a dream” has taken a huge step toward fulfillment. However, the new administration will have little time to reflect on victory as it faces serious economic challenges and a trillion dollar plus debt that will take years to resolve.
3. In Memory Of: Countrywide, IndyMac, WAMU, Wachovia And Others
Barely one year ago in 2007 these companies were not only household names but were considered financial giants. In one short year they have become a factoid of history. Some filed for bankruptcy while others were acquired by the likes of Bank of America, the federal government, J.P. Morgan Chase and Wells Fargo. 2008 reminded us that nothing lasts forever and everything is replaceable.
4. Facing Foreclosure Frenzy
As a direct fallout of the subprime collapse, the foreclosure rate in the U.S. hit staggering levels in 2008. At the opening of the third quarter foreclosures were up 25% over the previous October with a reported one in every 452 of the country’s homes in foreclosure. RealtyTrac reported last October that there was a sharp decline in foreclosure filings but it still estimated that by the end of 2008 there would be more than one million REOs on the books.
5. Home Prices Spiral Downward
The recession devastated many real estate markets across the country with the worst-performing towns and cities in places like central California, Miami and Las Vegas posting declines of 40% in 2008. The stranglehold on financing continued to drive home prices in many other places back to 2000 – 2002 levels, with predictions of continued declines in 2009 as unemployment reaches record highs and the financial meltdown spills over to other industries.
6. NAR – DOJ Settlement
Finally the long and protracted 2½ year legal battle between NAR and the Department of Justice (DOJ) was put to rest as Judge Kennelly issued his final judgment in November. In the end, NAR’s longstanding Internet Data Exchange (IDX) policy was validated as NAR was deemed to have not admitted any liability or wrongdoing and no payments were made in conjunction with the settlement. In addition, NAR has been cleared to reinstate an updated version of its Virtual Office Website (VOW) and the MLS has been preserved and strengthened in the process. Now it’s back to business.
7. Brokers Go Bust
Changing names, merging, consolidating, filing bankruptcy and closing branches was on the order of the day throughout 2008 as literally thousands of real estate brokerages companies went out of business during 2008. This included many independents as well as franchises from just about every major brand including Century 21, EXIT and RE/MAX. Also filling for bankruptcy is national franchise Help-U-Sell and Web 2.0 newcomers such as Igglo. 2009 may see even more brokers closing up shop than 2008.
8. Keeping It ShortFounded in 2006, Twitter moved into the mainstream this year as the next evolution in the social networking and micro-blogging environment. By using short text-based posts (affectionately named “tweets”), staying in touch has been given a whole new meaning.
9. ActiveRain Explodes Past 100,000 Members
As we discussed in last year’s report (Trend #1 – Two Worlds; One Industry) ActiveRain has moved to the head of the social networking line in the real estate industry. With as many as 35,000 users logged on at the same time, no one else has even come close to reaching that many Realtors® at one time. It goes without saying that ActiveRain has proven that social networking has made a home in real estate.
10. NAR Celebrates 100 Years
In May 1908, 120 men gathered in Chicago with the goal to “unite the real estate men of America.” Today the National Association of REALTORS® (NAR) is America’s largest trade association representing more than 1.2 million members. For 100 years, NAR and its members have established homeownership as a cornerstone of the American Dream and advocated private property rights as one of the fundamental principles that unite us as Americans. 2008 marked NAR’s centennial birthday.
How many of these events impacted you or were/are you aware of?
Learn more about Ludlow real estate by visiting ISellVermontRealEstate.com.
How To Choose An Okemo Mountain Realtor
How To Choose An Okemo Mountain Realtor
Your Okemo Mountain home is most likely the largest investment you have and choosing a Realtor to assist you with the sale is a major decision. Below are questions to ask when choosing an Okemo Mountain Realtor:
Make sure you choose aa Okemo Mountain REALTOR® who will provide top-notch service and meet your unique needs.
1. How long have you been in residential real estate sales? Is it your full-time job? While experience is no guarantee of skill, real estate – like many other professions – is mostly learned on the job.
2. What designations do you hold? Designations such as GRI and CRS®, which require that agents take additional, specialized real estate training, are held only by about one-quarter of real estate practitioners.
3. How many homes did you and your real estate brokerage sell last year? By asking this question, you’ll get a good idea of how much experience the practitioner has.
4. How many days did it take you to sell the average home? How did that compare to the overall market? The REALTOR® you interview should have these facts on hand, and be able to present market statistics from the local MLS to provide a comparison.
5. How close to the initial asking prices of the homes you sold were the final sale prices? This is one indication of how skilled the REALTOR® is at pricing homes and marketing to suitable buyers. Of course, other factors also may be at play, including an exceptionally hot or cool real estate market.
6. What types of specific marketing systems and approaches will you use to sell my home? You don’t want someone who’s going to put a For Sale sign in the yard and hope for the best. Look for someone who has aggressive and innovative approaches, and knows how to market your property competitively on the Internet. Buyers today want information fast, so it’s important that your REALTOR® is responsive.
7. Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction? While it’s usually legal to represent both parties in a transaction, it’s important to understand where the practitioner’s obligations lie. Your REALTOR® should explain his or her agency relationship to you and describe the rights of each party.
8. Can you recommend service providers who can help me obtain a mortgage, make home repairs, and help with other things I need done? Because REALTORS® are immersed in the industry, they’re wonderful resources as you seek lenders, home improvement companies, and other home service providers. Practitioners should generally recommend more than one provider and let you know if they have any special relationship with or receive compensation from any of the providers.
9. What type of support and supervision does your brokerage office provide to you? Having resources such as in-house support staff, access to a real estate attorney, and assistance with technology can help an agent sell your home.
10. What’s your business philosophy? While there’s no right answer to this question, the response will help you assess what’s important to the agent and determine how closely the agent’s goals and business emphasis mesh with your own.
11. How will you keep me informed about the progress of my transaction? How frequently? Again, this is not a question with a correct answer, but how you judge the response will reflect your own desires. Do you want updates twice a week or do you prefer not to be bothered unless there’s a hot prospect? Do you prefer phone, e-mail, or a personal visit?
12. Could you please give me the names and phone numbers of your three most recent clients? Ask recent clients if they would work with this REALTOR® again. Find out whether they were pleased with the communication style, follow-up, and work ethic of the REALTOR®.
When you are ready to interview Okemo Mountain Realtors, give me a call. I am glad to answer the above questions and any additional questions you might have.
5 Reasons To Buy Okemo Mountain Vacation Home
5 Reasons To Buy Okemo Mountain Vacation Home
With the stock market in turmoil, many people are looking for alternative investments. Most of us are scared to death of jumping into the market right now and wondering what to do with their nest egg…other than sticking it under the mattress.
Christine Karpinski, director of Owner Community for HomeAway.com (an online vacation home rental marketplace) and author of How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment, says buying a vacation home is an excellent home is a good investment right now.
Okemo Mountain home values are down right now, but history shows they always rebound, making a vacation home a great long-term investment. Christine doesn’t recommend buying with the thought of flipping it in a year, but buying as a long term investment.
You are probably asking why buying a vacation home is a good investment.
First, there are deals to be had. Prices are lower than a few years ago during the peak of the housing bubble. The excessive number of foreclosures is also keeping prices down and inventory up, making sellers more negotiable.
Interest rates also remain reasonably low, with rates hovering 6-6.5 percent. If you have good credit, there is mortgage money to be had.
Below are Christine Karpinski’s 5 Reasons Why the Vacation Home Rental Market Is Holding Strong…Even in our Weak Economy
1. It’s easy for consumers to find information on vacation homes. By visiting respectable websites travelers can quickly find the vacation home that’s right for them. HomeAway’s network of vacation rentals includes over 300,000 properties all over the world, making it possible for almost anyone to find one within a two- to three-hour driving distance from their home.
2. Vacation homes tend to be less expensive than hotel rooms. This is especially true if you’re traveling with extended family or a group of friends. HomeAway recently contrasted a three-bedroom vacation rental private condo in Orlando with a popular three-star hotel and found that the condo was cheaper by more than $1,700! “That’s a big difference, and in a tenuous economy it seems even bigger,” notes Karpinski.
3. When airfare gets expensive, people start taking road trips instead. Even with gas prices relatively high, it’s still far cheaper to drive a couple hundred miles to your mountain cabin than to fly to some lavish vacation destination. “Even with the bad economy, people need to take vacations,” says Karpinski. “In fact, psychologically, they may need to get away more than ever. A fairly inexpensive stay in a nearby vacation home is the perfect solution.”
4. The weak dollar makes U.S. tourist destinations attractive to European travelers, whose currency is still strong. “On my recent trip to Hawaii, I noticed a lot of German tourists,” notes Karpinski. “And when I speak to many of the vacation homeowners I work with, they confirm that they’ve encountered a surprisingly high number of European travelers lately.”
5. Business travelers still need a place to stay. When corporations must meet with business associates-who increasingly hail from overseas-they need good lodging solutions. Enter the vacation home. “More and more executives are putting their guests up in vacation homes instead of cramped, impersonal hotel rooms,” notes Karpinski. “It’s a far more comfortable option; plus many companies work out deals with homeowners whereby they can get ‘volume discounts.’ It’s a win/win for all parties involved.”
Learn more about buying a Okemo Mountain vacation home by visiting ISellVermontRealEstate.com or give us a call, 800-659-1819 #103.
Okemo Mountain VT Real Estate: Reverse 1031 Exchange Demand Rising
Okemo Mountain VT Real Estate: Reverse 1031 Exchange Demand Rising
A slower Okemo Mountain VT real estate market is creating more of a demand for reverse 1031 exchanges. Properties are taking longer to sell making it difficult for sellers to adhere to 1031 exchange 180 day rules. But there is another option called a Reverse 1031 Exchange allowing for the roll-over of proceeds after closing on another property. Inman had a great article by Ilyce Glink addressing reverse exchanges. Read what she has to say:
Q: We are Canadian citizens who have owned a home in Fort Myers, Fla., for four years. There is no mortgage on the property.
We have put the property up for sale, and have made a down payment on a new house. We have bought and sold in the past, and I understand that as long as the new house is equal or higher in value, there are no capital gains taxes owed on the profits under IRS tax code 1031.
Okemo Mountain Real Estate: Is Cobuying A Second Home for You?
Okemo Mountain Real Estate: Is Cobuying A Second Home for You?
Craig Venezia is a nationally recognized expert on home mortgages, and the author of Buying a Second Home: Income, Getaway, or Retirement. Second-home ownership in Okemo Mountain is more popular than ever due to such factors as the shrinking American family, older and wealthier households, and new technologies for working from home. One out of every three homes purchased in the United States today is a second home.
If you dream of owning a second home, but realize it isn’t in your budget at the moment, cobuying an Okemo Mountain second home may be just what you need to make your dream a reality.
Listen to Craig Venezia’s podcast. It may help you decide if cobuying is right for you.
Learn more about buying an Okemo Mountain second home by visiting ISellVermontRealEstate.com.
Do I Really Need To Complete The Honey-Do List When Selling My Okemo Mountain Home
Do I Really Need To Complete The Honey-Do List When Selling My Okemo Mountain Home?
That is the question all Okemo Mountain home owners should ask themselves when they consider selling their home.
The first item on the fix-it list: clear the clutter! If your closets, attic, basement, garage, and other storage areas appear neat, half-full and organized, your house will seem to have more storage space. To accomplish the clutter – clearing task, empty the house, hold a garage sale, and use the profits to help offset the next set of fix-it priorities.
Check your house for “curb appeal”. The exterior is the first impression a prospective buyer has of your home. Make it as inviting as you can. Think of it as outside decorating. Clean (or paint, if necessary) the exterior, re-sod brown spots and crab grass, mow the lawn, pull weeds, remove dead trees or plants, and trim the shrubs.
Flowers give warmth and personality to a home. Plant them tastefully in pots or beds at the entrance, on decks and around patios. If it isn’t flower season, at least clean the beds, remove the dead leaves, and cover the ground with fresh wood chips or other clean looking mulch.
If you have a limited budget, make the most of it. Put the money where it is most obviously needed and the return the greatest and most visible.
Fix Little Things
Take care of the little obvious things: fix leaking faucets, stop running toilets, replace broken windows, kill pet or mildew odors, repair holes in screens, remove mildew from tile, and re-caulk around bathtubs and sinks. Walk around; look at your house with a prospective buyer’s eyes. Small things tell buyers whether or not a house has been maintained.
Paint it!
A coat of light-colored, neutral paint-white or off-white-will make your home’s interior look crisper, cleaner, and also larger. Many buyers may not be able to imagine their sofa in your decor. White interiors work for the greatest number of people without their having to redecorate immediately. If you just moved, would you want to redo every room?
Your Carpeting
If the carpet is in reasonable condition, have it shampooed. If it is worn, threadbare or a non-neutral color, consider replacing it with beige or gray. You do not need to purchase the best quality money can buy. Lifetime wear is not required. You want it to look great now. Neutral walls and carpet do not offend anyone. Almost all furnishings look good with them. Rental property managers know this and have been doing it for years.
Professional Inspection
Consider having your house inspected by qualified inspector. Safety- and health-related items, such as radon and electrical problems could kill a sale if not properly attended to. It is much better to fix these items on your own time schedule and financial terms than hurriedly during a contract negotiation. Roof leaks, even if inactive, are also deal breakers.
What else do you fix amongst the inspector’s flagged items? Unless you can realistically get money back, fix only the problems with major systems. You want to keep your home’s selling price as low as possible to increase the pool of buyers.
Do not undertake any major remodeling in preparation for sale. It places more limitations on the size of your buyer pool. Tastes vary, and some people will dislike the results of your efforts. You will have to raise your selling price to reflect your fix-up investment, thereby pricing your home out of the range of other potential buyers.
A neutral color scheme in a house that sparkles brings you the highest return in the shortest time when selling your Okemo Mountain home.
Learn more about Okemo Mountain real estate at ISellVermontRealEstate.com or give us a call, 800-659-1819 #103.
Ludlow VT Real Estate: Is Owning Rental Property Right For You
Ludlow VT Real Estate: Is Owning Rental Property Right For You
Investing in Ludlow VT real estate and owning rental property sounds glamorous, but it isn’t for everyone.
Be sure you know what you’re getting into and understand what you are getting into before signing on the dotted line. Here are some questions you should ask yourself before purchasing an investment property:
• Where will the down payment come from for this property?
• Do you have cash reserves so you handle periods of vacancy, i.e. no income?
• How about reserves for unexpected repairs and other expenses?
• Do you need property to rent immediately or do you have time and money for a “fixer-upper”?
• Will you make needed renovations and repairs or hire someone else for the job?
• What type of property do you want: single family, apartment, duplex, condominium, or vacation property?
Thinking it through ahead of time assures that you won’t get caught making a rash decision you will regret later.
If you decide now is the time to take advantage of lower market prices and invest in Ludlow VT real estate and rental property, visit ISellVermontRealEstate.com.
When Buying A Ludlow VT Home Makes Sense
When Buying A Ludlow VT Home Makes Sense
The housing market has never been better for many potential Ludlow VT home buyers. In fact, more often than not, it is less expensive to own your own home rather than rent.
The National Low Income Housing Coalition reports that in 57 out of the 100 most populated metro areas, renting a three-bedroom home is more expensive than monthly costs on a six percent mortgage for a typical low-priced house in the same area.
With all the news these days concerning the economic crunch and these tumultuous economic times, you might think I’m crazy saying it is a good time to buy a Ludlow VT home. Of course, buyers with strong credit are best positioned to take advantage of today’s opportunities. A high credit score will yield a lower interest rate and increase the likelihood that a loan application will be approved.
For example, a buyer with a 6 percent mortgage will pay a third less per month than a buyer who has a loan at 8 percent. This difference can be hundreds of dollars per month.
FHA loans, VA loans and government backed first-time buyer loans are all available to qualified buyers. With the current low interest rates and affordable housing prices, it is a great time to buy your Ludlow VT home.
It is also a time to keep in mind that buying a home is a long term investment…and an investment you and your family can enjoy for many years!