Houses

Ask a CPA: Selling a House and Tax Deductions

My wife and I lived in a home for more than 10 years. In August of 2014, we moved out and put it into service as a rental. We intend to sell the house when our current tenants move out (their lease is up at the end of August of 2015, but we’ve told them they can move out earlier if they want and they’ve indicated that they may).

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Restoring a Ramshackle House at 22

I bought a house in cash when I was 22, and then sold it for 2.5 times the amount of money four years later.

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12 Mortgage Terms You Should Probably Know About

Flickr’s creative commons (user Matthew Rutledge)

Sponsored by Chase Mortgage Banking. Review their resources to help you find and finance your home.

When I waded into the business of trying to buy an apartment, I was soon waist-deep in Things I Didn’t Know. There were so many unfamiliar words and abbreviations and clumps of jargon. But I went to the kind of hoity-toity liberal arts college that was big on literary theory — Zizek, Foucault, Derrida and Butler were scary at first too — so once I discovered that their bizarro language could be decoded, their ideas were pretty straightforward. (Most of the time.)

If I could kick my way through the murk of that and end up swimming, I figured I could do the same thing with Mortgage-ese. And so I did, with nothing to help me but sheer cussedness and my determination not to pay anyone to do anything I could conceivably do myself. Here is a glossary of what I learned are some of the most important mortgage terms. Familiarize yourself with them and soon you too can feel more confident in your home-buying adventures.

But first: watch this quick lesson that details the most important terms

Adjustable-rate mortgage (ARM) A type of home loan in which the interest rate changes according to a standard financial index. ARMs can start off lower than a fixed-rate mortgage, but that can change. I got one that is steady for seven years and then adjusts, which is an especially good deal if the odds are good that you will sell your property in the near term (rather than, you know, 30 years from now).

Appraisal How much the property is worth according to a professional appraiser.

Assessed value How much your house is worth according to the municipality, so that they can figure out how much you have to pay in real estate taxes. Taxes may be annoying, but remember: they help maintain the roads, and potholes outside your front door would make your place less attractive to future buyers.

Closing costs Expenses like attorney’s fees, taxes, escrow payments and title insurance that buyers and sellers incur while transferring ownership of a home. These will, almost inevitably, run higher than you expect, so plan to have more cash on hand than you think you will need.

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The Pros and Cons Of Collective Living

“The $1,000 federal Child Tax Credit, for example, is much less generous than the $7,500 federal tax credit for electric cars.”

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It All Comes Out In The Wash: A Story Of Love And Laundry

Laundry in New York is even worse than regular laundry. You have to locate a laundromat, figure out what kind of money they take, haul your stuff there, come back in time to switch it before some angry weirdo tosses your intimates on the floor, lug it back home, and fold it. It can be a day-long saga and that’s if you have one nearby and it doesn’t require all quarters.

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Own This B&B!

This news item seems to be going around like a wet cough. Maybe she’ll make her goal on semi-ironic hipster Lumbersexual entries alone.

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Giving Up a House to Pay Off $63,000 in Credit Card Debt

Sleepless nights. A knot in the pit of the stomach. A gnawing sense of unease.

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Today’s Rent-Saving Solution: Move Into An Old-Age Home

How long before someone options the rights to this story and turns it into a movie, or at least a sitcom?

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‘Buying the Worst House in the Best Neighborhood Can Actually Backfire’

Oh, conventional wisdom. When it’s wrong, it’s not merely wrong. It can wreak havoc.

Quartz decided to test some of that good old conventional wisdom, specifically the adage that getting the worst house in the best neighborhood is a sound investment. The results were surprising. Or not, if you’re a determined skeptic.

we found that only rarely does the bottom 10% outperform the top 90% of houses in a ZIP code. On average, these bottom-tier homes do neither better nor worse than the others.

Looking at those numbers, we might have concluded that buying a neighborhood’s worst home is therefore a neutral investment strategy—a myth, but not a harmful one. It doesn’t maximize returns. But it doesn’t cost buyers either.

Then, however, we dug a little deeper—and we saw that buying the worst house in the best neighborhood can actually backfire. That’s because the more affluent a neighborhood is, relative to its greater metropolitan area, the worse the homes in its bottom 10% tend to perform.

In short, the nicer the neighborhood, the bigger the myth!

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