I have just recently arrived at a point in my life where because of a consolidation loan and a pay increase I have significantly more discresionary dollars than in years past. Also, the pay increase is going to increase my taxable imncome to a point that will move me into the 28% tax bracket. In order to reduce my taxable income enough to remain in the 15% bracket, I would have to come up with roughly 6K in additional deductions. I figure the best way to do this is to buy a different house that will increase my interest deduction by almost that amount and increase my contribution to the church to make up the rest. I need advice on the following issues:1) Is this a good strategy or should I be considering something further? (the bigger house is necessary for my growing family)***You might consider purchasing a duplex using one for your family and renting the other out. This could procuce a nice income, help you build equity, and possibly produce deductible losses that would keep you in a lower tax bracket. Hopefully that won't always be your objective. Make as much as you can, invest wisely, and let the taxes take care of themselves. They just won't go away. Your only hope is to minimize them 'n keep movin' on up!=:)************************2) How can I save the money for a down payment and minimize my tax liability in the mean time?***It appears you already have equity in the home you now own. You could decide to sell it or hold on and turn it into a rental.********************3) How do I sell my current house and by a new one while minimizing my tax liability?This is my second sale of a home so I do not get the tax break for the first time sale of a home.***Under the new rules, you are not limited to a once in a lifetime exclusion. As long as you have lived in your home for two out of the last five years, you qualify for an exclusion of gain of up to $250,000 ($500,000 in the case of a married couple filing jointly). You qualify for this benefit any number of times over a lifetime, as long as you meet the standard.Hope this helps!=:)"Jack"
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar<