what does it mean that owning a home is like a tax shelter?
new homeowner here and everyone always says now you have a tax shelter. what does that mean as far as when i file my taxes, and can i account for my hoa dues when filing taxes, confused as to what that all means .
- chatsplasLv 71 decade agoFavorite Answer
Instead of taking the standard deduction, you itemize and get a deduction for monies you pay for mortgage interest and real estate taxes. This reduces your taxable income.Source(s): tax pro
- Lone WoofLv 71 decade ago
A home is not a tax shelter, at least in tax lingo. You are paying yourself by investing in the home even if you are paying interest on your mortgage. The RE taxes and mortgage interest are deductible. Other items may also be deductible. Best to see a tax professional and get it done correctly the first time.
- Ralph TLv 71 decade ago
If you can itemize your tax return,you can deduct certain costs like loan points,the interest and real estate taxes.
If you sell the house after 5 years,the purchase price can be deducted from the selling price before paying taxes.
IRS rules apply so the tax issue will be affected.
I don't know about the dues,you will need to ask the IRS.
- Anonymous1 decade ago
you can deduct mortgage interest and property taxes on your tax return IF you itemize deductions - HOA fees are NOT deductible