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Can I still convert my secondary home to primary then sell it after two years to reduce my tax liability?

You can still convert a secondary home into a primary home to reduce tax liability so long as you live there two of the last five years, have not claimed another primary home in two years, and meet all other eligibility requirements.

question
Are mortgage interest and property taxes that I pay on a second home deductible?


reply
Yes and maybe.

The mortgage interest paid on a second residence is deductible as long as you do not rent the home during the tax year and the mortgage meets the same deductible interest requirements as a primary residence. If you rent the house, you must use it for more than 14 days or more than 10% of the number of days you rent it, whichever is longer, in order for mortgage interest to be deductible.

If the home was purchased by December 15, 2017, the total amount you (or your spouse if you are married and file a joint declaration) can treat as home purchase debt for your primary and second homes is $ 1,000. .000; or $ 500,000 if married to deposit separately. If the home was purchased after December 15, 2017, the home purchase debt limit is $ 750,000. or $ 375,000 if married to deposit separately. tax services Sacramento State and local property taxes are generally deductible.


Deductible real estate taxes do not include taxes levied on local services and improvements that directly add value to real estate, e.g. B. Surveys for sidewalks, water pipes, sewers, parking lots, and similar improvements.
A detailed fee for services for specific properties or individuals is not a property tax, even if the fee is paid to the tax authorities. You cannot deduct the fee as property tax for a flat rate to provide a service (e.g. a fee of $ 5 for every 1,000 gallons of water you use), a regular fee for residential service (e.g. $ 20 per month or $ 240 annual garbage collection fee) or a flat fee for a single service provided by the local government (e.g., $ 30 for mowing the lawn because it has grown more than a local ordinance allows).
The total allowable deduction for all state and local taxes (TAXMAX Services), including property taxes, is capped at $ 10,000. or $ 5,000 if married to deposit separately.


Additional information


Tax Issue 503 - Deductible Taxes

Publication 527, Residential Properties (Including Vacation Home Rentals)

Publication 530, Tax Information for Homeowners

Publication 17, Your Federal Income Tax For Individuals

Can I deduct personal taxes paid as a detailed allowance in Appendix A?

 

category
Detailed prints, standard prints
Subcategory
Real estate (taxes, mortgage interest, points, other real estate costs)

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