Continuing with last week’s discussion about preparing for tax season, I wanted to spend some time this week covering issues related to paying taxes on vacation homes. Many homeowners in the Okemo Mountain area use their property as a vacation home – but can these homes truly be claimed as vacation properties?This article from RealEstateJournal.com answers this and other important questions, such as:
When and under what circumstances do I have to pay taxes on rental income?
What sort of deductions can owners of rental properties take?
If my vacation home is considered a secondary home (not a rental home), what deductions can I take?IRS Publication 527: Residential Rental Property
IRS Tax Topic 415: Renting Residential and Vacation Property
IRS Publication 925: Passive Activity and At-Risk Rules
To learn more about owning an Okemo Mountain vacation home or Ludlow VT real estate, please call me at 802-3531983 or visit ISellVermontRealEstate.com. You may also begin searching the MLS here!
Once you have determined which category your property qualifies as, there is a helpful chart in the article that will give you an idea of what to expect as far as property taxes this year.
Other helpful links on this topic:
– Prepare for the arrival of your records (designate an envelope or folder to store all of the records you’ll receive in the mail)
– Track down social security numbers (make sure you have the correct SSN’s for everyone in your family)
– Find your forms (if you are not filing electronically, download the necessary forms or pick them up at a post office)
– Decide how you want to do your taxes (Do-it-yourself or hire a pro? Paper and pen or computer software?)
– Consider electronic filing (find out if you qualify for Free File!)
– Use direct deposit (it may not be as exciting as receiving that refund check in the mail, but it’ll save you a trip to the bank!)
– Don’t panic!
I’d like to add my own advice: if you bought or sold a home in 2007, pull out those closing documents and start making copies! You will need to provide proof of your purchase or sale (usually a closing statement will suffice), along with any loans that were taken out or paid off in 2007. If you have lost any of these important documents, contact your Realtor who can help you track them down.
If you are thinking of listing your home in the spring, now is the time to start cleaning up and clearing out the clutter so you’ll be good to go in 2008! I wrote a “State of the Real Estate Market” article for the Frontiersman newspaper that comes out at the end of the month. This is good information for anyone looking to sell in 2008 or anyone just wanting to know the real facts about the residential real estate market.
Attention all seniors graduating from High School in May of 2008. Apply for one of our three scholarships we will be awarding this year. We give away 3 scholarships totaling $3000 each year to graduation seniors.
Attention all renters! This is a great time to buy with low interest rates and several new homes to choose from. Stop throwing away rent and start earning equity.
Red Cross award. The local Red Cross Chapter Thanks the Kristan Cole Team for monetary contributions and whole blood and plasma donations. Also don’t forget about our warm coats—warm hearts coat drive for children. Drop off at our office anytime this month.
Lawrence Yun, senior NAR economist, said “Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels.”
Existing home sales are expected to rise to $5.7 million in 2008 – making it the fifth highest year on record. Existing home prices, which declined 1.9% to a median of $217,600 in 2007, are expected to go back up about .3% in 2008. As Yun noted late in 2007 “even with a modest decline in the national aggregate price this year, it’s important to keep in mind that nearly two-thirds of the metro areas in the US are showing price increases … the apparent disparity results from fewer sales in high-cost areas, so a change in the mix is dragging down the national median home price.”
To find out the latest trends in Ludlow VT real estate, please call me at 802-353-1983 or visit ISellVermontRealEstate.com. To begin searching for Okemo Mountain VT homes, please use my complimentary MLS search.