Seeking help on this scenario. Have HELOC on the house we are living in. We borrow money on the HELOC to build another house and move into the new hou...
Seeking help on this scenario. Have HELOC on the house we are living in. We borrow money on the HELOC to build another house and move into the new house. Turn the old one with the HELOC into a rental property. I am a realtor and actively manage this rental property as a full time professional. As part of my active business, I can deduct any losses that I have on the rental property – which are mortgage interest and property taxes minus rental income. Now the question is can I deduct the HELOC interest that was used for building my current primary home? What happens I pay off some of this HELOC debt and draw again for some other uses later on. Which means it is like an account where I can borrow and pay off – with interest deduction. Greatly appreciate any thoughts.
I believe when we made the house a rental there was a 0K HELOC and it was further increased to 0K. After that I paid off some, reduced to 0K.
All the initial 0K draw on HELOC was used for the new home construction.
I have had a very part-time photography business for the last six years. I’ve had a NOL every year because the income from the business is less than the amount I spend on equipment for the business. This year I’m having to reclassify my business as a hobby because it has not had a profit in five years. I’m not filing Schedule A Itemized deductions because my allowable deduction is limited to business income amount which was 0 which is much less than the standard deduction of 50. I’ve listed the type & amount of income from photography on line 21 of form 1040. Am I considered self-employed, do I need to fill out Schedule SE self-employment tax form?
Charles, Thanks, you answered a previous question of mine too.
Robyn, it’s comforting to have the advice of an expert. Thank you!
Bob, I have no mortgage or property taxes & I made less than K in 2008. I filled out a Schedule A & my total itemized deduction is 6 because of the 2% limit. In previous years I filed Schedule C & Form 4562. I would usually Section 179 anything that cost less than 0 & depreciate anything that cost over 0. I purchased over K worth of equipment in 2008. Now that I have most of the equipment that a professional photographer needs, I must classify my business as a hobby. It’s disappointing but now I know I need to work harder at making a profit if I’m gonna say I have a Photography Business. Thanks for your answer.
I bought a home in November, ’07 and am renting out my old property that I lived in until November. The renter moved in Dec 1, but due to a promotional two month no-rent period, they didn’t start paying until February ’08. I also did about 00 worth of repairs on the old property in November to prepare for the renter moving in.
Specifically, I’m interested in:
* Mortgage interested. Where do I place each? Is the mortgage interest for the old property a personal or business expense or a primary residence since I lived there 11 months? Or is it prorated?
* Are property taxes on the old property personal or business expenses?
* Are the property taxes on the
I paid mortgage interest on both the old and new property that year business or personal expenses?
* Can I deduct the promotional cost (2 month free rent) as a business expense?
* Can I deduct the repairs as a business expense?
* Can I deduct the last 2 months of association fees and homeowners insurance as business expense?
FOR AGI deductions reduce AGI, the importance of classification is because the AGI is used for establishing limits on certain deductions FROM AGI such as medical expenses, education expenses, property taxes, charitable contributions, and interest found in the itemized deductions. Generally, deductions FOR AGI are related to business expenses while, deductions FROM AGI are personal in nature.
I need to refinance my mortgage out of the ARM I have ASAP. My father is also interested in refinancing his home to a lower rate as well. He has been talking with a Broker about a "combined mortgage" (I have never heard of this, I am also in the mortgage business).
I originally thought the man will be doing the refi on my fathers home, taking cash out, and paying off mine, but he says this isn’t the case. There will be a "ghost lien" placed on my property and each of us will be making payments to the loan…can someone explain this process? I’ve never heard of it.
Does this even exist? What are the pro’s and con’s of combining our mortgages (as far as property taxes and interest payments goes) and will this affect my credit and income tax deductions? Am I better off refinancing on my own?
If they do charitable work they should get a deduction just like other businesses. Shouldn’t a million dollar church building pay the same property taxes as the million dollar bowling alley down the road.
I have/had a business for the past 8 years. Last year I made absolutely no money .(Personal problems). The s corporation that I have, owes the bank on overdrafts and line of credit. I was lucky enough to get fill in positions, day here and there, totalling about ,000. Can I claim that as income? I did not get any 1099′s as I never earned more than 0.00 at any one time. I cashed in mutual funds for less than I paid for them and even though I paid taxes on that money in the years I earned it, can this be used as income? I also spent all my savings and basically that is how I survived. I am a single mother of one child. I’m barely hanging on to my house, spent a lot on interest, property taxes, have deductions for ,00.00 approx, will probably get 0 refund and am worried now that I may not even get the rebate. I did not recieve the letter. I have a small amount of interest earned to claim, but that’s it. Any help would be appreciated , thanks.
Tennessee Property Taxes – Some Interesting Tips For Tennessee Residents
Tennessee property taxes which are collected at a local level are primarily the sources of funds for the local government of Tennessee. The counties and cities within the bounds of Tennessee rely basically on the property taxes collected in the locale. Social services like public libraries, public schools, and fire and police support are primarily funded by the collected Tennessee property taxes. The biggest bulk of these funds is channeled to the education sectors or the public schools.
The tax rates collected from residents of Tennessee are determined at the local level; of course, vary according to factors needed to be considered. However, the general tax rate in the place is not high. The rate or amount of Tennessee property taxes that you’ll have to pay, like in the usual cases in most sates, is primarily dependent on two major factors: millage rate and the market value of you home. A tax assessor assigned by the local government will estimate the market value of your home and will also tell you its computed value. After that, the property will be subjected to a reassessment mainly due to tax purposes once in every six years. A much higher value of the Tennessee property taxes at the time of the valuation, however, does not entail an increase in your tax.
At the time the local budget is already created, the tax department will then use the combined property values together with some revenue requirements to determine the accurate millage rate. Frequently, the computed millage rate will be based on 25 percent of the market value computed instead of computing the full market value of the subjected residential property. Meanwhile, commercial properties have 40 percent of the computed market value as the tax rate. When the local government is planning to increase the rates, a public hearing is required before approving the increase; meanwhile, they can opt to lower the rate any time.
Tennessee has the 40th spot on the property taxes paid by the residents, among the different states of the United States. In Tennessee, an average homeowner pays around $794 annually as Tennessee property taxes for having a home worth $114,000.
If you think that the local tax assessor estimated a very high market value of your home, you have the right to question his valuation. The appeals with tax assessors are usually discussed during the motnhs of May and June every year. If you are still resolved with the value presented by the tax assessor, you can bring your appeal to the county commissioners and even to the councilmen of your city in July. If it was proven that the market value estimate was too high, the Tennessee property taxes will be deducted.
Contrary to the ways of the other states, Tennessee does not have the homestead exemption offer for the homeowners. Perhaps, it is because the state does not impose taxes on wages and salaries; although there is a fixed 6 percent rate for bonds and stocks.
There are exemptions in Tennessee property taxes, but are only for the disabled, elderly, and veterans.
Here in NC the assessed value for the property taxes was done at the very peak of the bubble (early 2008). Property taxes are therefore way too high, and will be for the next 8 years. I don’t think this is really an option, but I’m wondering what the consequences are for not paying property taxes. If I sell my house in a year without paying any taxes, will there be any recourse. What if I move to a different county/state?
If you don’t pay your property taxes, the city/county will put a lien on your home. Also, many counties in NC publish a list of delinquent taxpayers every year. If any of your friends or family member read the list, you might be subject to their ridicule.
Penalties and interest will be added to your tax debt. When you sell the house, the total debt will be subtracted from any amount due to you. As long as there is a tax lien on the property, you will not be able to refinance the house or get a home equity loan or line of credit.
You are also working on a false assumption. The valuations that are done are only part of the formula to calculate your taxes. The other big part is the tax rate. The county likely lowered the tax rate to at least partially offset the higher valuations. In other words, the city or county knows how much it needs in tax revenues. The property valuations just distribute the burden.
The only way you can get your taxes reduced is if you were to find a flaw in the valuation such as if your house is sitting on 0.35 acres and your neighbors have at least 0.5 acres, then you can check to see if the county is listing the same value for your house as the others.
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