rickjones posted on May 02, 2011 14:08
Buy a house and make lots of money...and pay taxes. Purchase a house in a declining market and lose lots of money….and get NO tax relief.
There have been capital loss proposals that have been in place dating back to the collapse of the housing market in the Sun Belt states in the early 1990’s, but be clear, there is no deduction for a capital loss on the sale of your primary residence.
Even refinancing a home, when you need to lower your monthly payment, offers some bad news. You can not deduct points (loan fees) if you simply refinanced to obtain a lower interest rate on your loan.
The potential for interest deductions for second home ownership is now under fire as a potential for revenue enhancement by the Feds. Even managing an investment property from home is being challenged. People that take home office deductions need to make sure that there is a dedicated room in the house for the task, and simply bringing a laptop into a room does not quality for a home office deduction.
While the landscape looks like it may change, homeownership still rates well as a long term investment strategy, with the added benefit that you can actually USE and ENJOY this type of investment.