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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (9409)	9/18/2006 2:19:20 PM
From: Ilaine	Read Replies (1) \| Respond to of 218847

The real estate tax deduction and interest rate deduction of course only partially offset those costs of real estate tax and interest. It's a dollar for dollar deduction against gross income, which, for one thing, gets us out of AMT problems, which is a big savings in its own right, e.g., we can deduct almost 100% of the kids' college expenses rather than being phased out. Also, there are goodies you can deduct with itemized deductions you can't deduct with standardized deduction. Bottom line, our itemized deductions are much, much higher than standard deduction, $35K vs. $10K. Home office deduction isn't dependent on owning. Good point, except for the capital improvements, which are deductible now, although they will have to be recaptured later. And we have done a lot of capital improvements, new furnaces, new floors, and will have to do more. Example, my home office is about 17% of total house, so 17% of all capitol improvements are deductible, and 100% of capital improvements just to the home office. We rented for many years because we thought we were better off that way, but once we actually discovered the advantages to home ownership in the US, we were astonished. Maybe there's some logic to renting that I am missing, other than the old bugaboo, "the real estate market will crash and you'll lose all your equity!" Maybe so, maybe not, I don't care, this is my house and I plan on living here for 20 more years, at least. If we can't get a good price when my husband retires, we'll live here until we die and give it to our children. Hard to imagine that a 5 bedroom house on 1/3 acre just outside the Beltway, 2 miles from George Mason University, will lose all its value, but who knows? (Six bedrooms if you don't need a home office.)