The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Salaried & no-deductions = SOL?||Date: 8/30/2001 2:40 PM|
|Author: irina39||Number: 53710 of 120408|
My answer would be real estate. Depending.
First of all, wow, you are in an enviable financial situation. Most aren't so lucky. If only I had such issues. Now to your question:
The only remaining tax deduction of consequence [other than children and lets not go there] is the home mortgage deduction. There are a lot of plusses and minuses to owning a home and/or a second home.
Having the ability to itemize using the power of the home mortgage deduction gives me [SE and salaried both] to throw in a lot of expenses/deductions on my sched A that normally I would not get because I could not hit the threshold above the standard deduction...
That said, owning a house can be a pain in the *&^%$#$%^. Renting a home to others can be a DOUBLE *&^%$%^&*#$. Owning a 2d [vacation] home where you spend 2 weeks can be relaxing, helpful and annoying.
I own a home for other reasons than just the tax deduction, that is, for a place where I don't hear people above me or on one side or the other among them... Before you consider home purchase, consider the maintenance taxes, etc, BUT also the intangibles... a place of your own...
Rental Income can be quite a moneymaker, you get to deduct interest and depreciation. Again, look into it before jumping into the deep water...
Is there a place where you would like to retire/visit-purchase a vacation home. You may be able to rent that [no you are NOT going to be able to come out even on the mortgage,etc]...
No where here did I mention timeshare [or points or whatever], run from those sinkholes...
Do you have the type of job where you could even utilize a home or vacation home [now or 5 years?] If not, stay where you are.
Finally, there are MANY good arguments to renting ... however, the majority of people with homes [not land] increase their net worth vis a vis people who rent.
Well, that was a tome.
Hope it gives you food for thought,
PS As a fellow NYCer, its a bit of an eye -opener when YOU have to fix the clogged drain or leaking pipe. No management company to call. Keep that in mind as well...
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