federal tax advice wanted for new homeowner

[MrMom]

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geepondy said: I just paid a $4800 assessment for condo roof repair. Can I somehow claim that in 2005 tax return?

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Personal property - NO

Rental property - YES but the cost must be amoritized over the inprovements life. /ubbthreads/images/graemlins/broke.gif

 

[LEDmodMan]

I got screwed just like this a couple of years ago. I bought my house just before Thanksgiving, and therefore did not have much to claim in interest come tax time.

I wasn't quite able to itemize that year unfortunately, so most of the tax benefits you would usually get the year of buying a house were lost. /ubbthreads/images/graemlins/icon23.gif /ubbthreads/images/graemlins/icon3.gif

Oh well though, I knew this going into it, and made this point very clear to the builder when they were pushing to close before year's end (the house was already built turn-key). I told them they had to make it very worthwhile to me, so I got them to give me over $12,000 in "upgrades" and changes that I was already looking at doing for free to make up for my loss in tax benefit if I closed prior to Jan. 1. They knew it was impossible to sell to someone else before year's end since we already had an agreement in place that limited what they could do. I pretty much had them by the balls, and they knew it. It was one of the best deals I ever got! /ubbthreads/images/graemlins/grin.gif It worked out for both of us in the long run though, since I have over $30K in equity in two years, and they didn't carry the property over into the next year (they REALLY didn't want that to happen, would have killed their sales numbers). However, I won't see the main benefit on my side until I sell the house.

 

[Lurker]

I am sorry that you are disappointed with the income tax write-off. There are other surprise costs of home ownership as well. Just wait until you need to buy a furnace, repaint the exterior or re-roof (less of that with a condo). If you ever want to sell it, you will be asked to give 6% of the gross value to the realtors. The bottom line is that with renting or owning, you have to pay and pay and pay. There is no way around it.

But with owning there are some huge benefits. Number one is that you don't face increases in your monthly payment every year like you would if you rented. Five or ten years from now if you are still living there and you compare what you would otherwise be paying in rent, you will be shocked at what a great deal your mortgage payment has become. Another big plus is that in 30 years you will make your last mortgage payment. That never happens with rent. You will also own a valuable asset to boot. Long term, there is no comparison even if there are some bumps along the way.