It’s that time of year again. I can tell people are starting to do their taxes by the number of e-mails I receive with tax questions regarding real estate.
It is best to let the professionals handle your tax questions.
Nevertheless, I’ve sifted through several search-engine pages to find some sites worth clicking. I hope this will get you headed toward answers on real estate investments, vacation homes or personal properties.
Here are some links that I have found beneficial.
m www.IRS.gov. This is the best site for all your real estate tax questions — the official Web site of the Internal Revenue Service. I found a page that was very beneficial: Frequently Asked Questions (FAQ) regarding deductions for your house (www.irs.gov/faqs/faq3-6.html). Here are topics like flooding, deductions for second mortgages and home equity loans.
If you need deeper reading for a particular issue, you might want to check some of these online publications: Type the publication or form number into the search tool on the FAQ page: First-time Homeowners, IRS Publication 530; Selling Your House, IRS Publication 523; Business Use of Your Home, Publication 587; Moving Expenses, Publication 521; Home Mortgage Interest Deductions, Publication 936; Giving Away Real Estate, Form 8283.
If you’re facing losses and financial struggles due to the hurricanes of 2005, the IRS has some help for you.
Publication 4492 explains the tax law changes and relief provisions available to individual and business victims of hurricanes Katrina, Rita and Wilma (www.irs.gov/pub/irs-pdf/p4492.pdf). A PDF reading program is required to access this document. The IRS also has announced a phone number for hurricane victims who need tax assistance: 866/562-5227.
• www.Nolo.com. This is a legal Web site that I visit quite frequently. Its “Top 10 Tax Deductions” article includes mortgage interest; points; equity loan interest; home improvement loan interest; property taxes; home office deduction; selling costs and capital improvements; capital gains exclusion; moving costs; and mortgage tax credit.
m www.smartmoney.com. If you own a vacation home, click on SmartMoney’s guide on how to report taxes on the beach house. The Web page (www.smartmoney.com/tax/homefamily/index.cfm?story=vacation) talks about how taxes impact the various ways you use the house — use it a lot, rent it a lot; use it a lot, rent it a little; use it a little, rent it a lot.
m www.jacksonhewitt.com. Investors with rental properties can visit Jackson Hewitt Tax Service’s piece on tax concerns for rental properties (www.jacksonhewitt.com/resources_library_topics_realestate.asp).
The site addresses various topics, including what is and is not considered rental income, what expenses can be deducted and what to look out for as an investor.
DONATIONS
Some folks want to donate real estate rather than sell it. There are varying tax benefits and responsibilities.
Begin with the IRS information (www.irs.gov/formspubs/article/0,,id=112782,00.html).
One of the best explanations of real estate gifts I’ve seen is at the Lincoln Center for the Performing Arts’ guide to estate gifts (www.lincolncenter.org/supportLC/plannedgiving_real.asp?ws).
The site addresses such topics as what typical donors of real estate have in common, ways to make a gift of real estate, tax rules for gifts of real estate, using a qualified appraisal to valuate the property, and others.
The FindLaw Guide to Estate and Gift Taxes (estate.findlaw.com/estate-planning/estate-planning-taxes/estate-planning-taxes-faq.html) addresses questions about estate having to pay taxes after one’s death, rates for federal estate taxes, giving property away to avoid estate taxes, state-imposed death taxes, and avoiding paying state death taxes. It’s a valuable resource for those facing estate and gift issues for 2005.
PUBLIC RECORDS
The International Real Estate Directory’s Guide to Property Taxes (ired.com/tax) provides a state-by-state, linked map providing access to many real estate property tax sites. Click the state of Texas, for instance, and you’ll have links to scores of county appraisal district Web sites and their databases. Some states have plenty of information; others have none.
The site for Nationwide Environmental Title Research LLC (www.netronline.com) creates databases for sale. In addition, it has a very complete — and free — directory setup of public records located on the Web.
Hopefully, these sites provide some nuggets of wisdom.
M. Anthony Carr has written about real estate since 1989. Post questions and comments at his Web log (https://commonsenserealestate.blogspot.com).
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