Top 6 Home Tax Deduction Mistakes: North Shore Real Estate

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Across the nation and of course here on the North Shore of Chicago that time is upon us….tax season-2018!  For North Shore real estate homeowners, home sellers, or prospective first time North Shore home buyers, having a basic understanding of tax guidelines can potentially shield you from Taxbreaksfinancial heartache and can help to ensure you’ll benefit from many of the exceptional tax benefits of property ownership. Below are the top 6 tax deduction misconceptions.

Note: Due to the various restrictions and conditions regarding real estate tax benefits, it is important to consult with one’s financial advisors or accountants to fully understand the benefits and opportunities of tax benefits to those who own North Shore real estate. The tips provided give general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction or location.

See a list of available North Shore tax preparers and financial advisors HERE . Or, let us know who you recommend for tax preperation on Chicago’s North Shore!

Schedule A is the part of Form 1040 commonly used to list myriad deductions, and the more details, the more prone someone may be to misinterpretation with their taxes. To save time and money, four tax experts weigh in on the following 6 most common Schedule A concept mistakes homeowners may make.

Concept #1: Line 6 – real estate taxes

Your monthly mortgage payment often includes money for a tax escrow, from which the lender pays your local real estate taxes.
The money you send the bank may be more than what the bank pays for your taxes, says Julian Block, a tax attorney and author of Julian Block’s Home Seller’s Guide to Tax Savings. That will lead you to putting the wrong number on Schedule A.
Example:

  • Your monthly payment to the lender: $2,000 for mortgage + $500 escrow for taxes
  • Your annual property tax bill: $5,500

Now do the figures:

  • Your bank received $6,000 for real estate taxes, but only paid $5,500. It may keep the extra $500 to apply to the next tax bill or refund it to you at some point, but meanwhile, you’re making a mistake if you enter $6,000 on Schedule A.
  • Instead, take the number from Form 1098—which your bank sends you each year—that shows the actual taxes paid.

Concept #2: Line 6 – tax calculations for recent North Shore buyers and sellers

If you bought or sold a North Shore home in the middle of 2013, figuring out what to put on line 6 of your Schedule A Form is tricky.
Don’t simply enter the number from your property tax bill on line 6 as you would if you owned the house the whole year. If you bought or sold a house in midyear, you should instead use the property tax amount listed on your HUD-1 closing statement, says Phil Marti, a retired IRS official.
Here’s why: Generally, depending on the local tax cycle, either the seller gives the buyer money to pay the taxes when they come due or, if the seller has already paid taxes, the buyer reimburses the seller at closing. Those taxes are deductible that year, but won’t be reflected on your property tax bill.

Concept #3: Line 10 – properly deducting your points

You can deduct points paid on a refinance, but not all at once, says David Sands, a CPA with Buchbinder Tunick & Co LLP. Rather, you deduct them over the life of your loan. So if you paid $1,000 in points for a 10-year refinance, you’re entitled to deduct only $100 per year on your Schedule A Form.

Concept #4: Line 10 – HELOC limits breakdown

If you took out a home equity line of credit (HELOC), you can generally deduct the interest on it only up to $100,000 of debt each year, says Matthew Lender, a CPA with EisnerLubin LLP.
For example, if you have a HELOC for $200,000, the bank will send you Form 1098 for interest paid on $200,000. But you can deduct only the interest paid on $100,000. If you just pull the number off Form 1098, you’ll deduct more than you’re entitled to.

Concept #5: line 13 – Private mortgage insurance

You can deduct PMI on your Schedule A Form, as long as you started paying the insurance after Dec. 31, 2006. Unless Congress acts to extend the PMI deduction, however, 2011 is the last year for which you can take this deduction. (Also, this is also a good time to review your PMI: You might be able to cancel your PMI altogether because you’ve had a change in loan-to-value status.)

Concept #6: line 20 – casualty and theft losses

You can deduct part or all of losses caused by theft, vandalism, fire, or similar causes, as well as corrosive drywall, but the process isn’t always obvious or simple:

  • Only deduct losses that are greater than 10% of your adjusted gross income (line 38 of Form 1040).
  • Fill out Form 4684, which involves complex calculations for the cost basis and fair market value.  This form gives you the number you need for line 20.

Bottom line on line 20: If you’ve got extensive losses, it’s best to consult a tax pro. “I wouldn’t do it myself, and I’ve been dealing with taxes for 40 years,” says former IRS official Marti.

Get more tax tips HERE

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Home Staging During the Holidays: Chicago-North Shore Real Estate

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Don’t let the thought of selling your North Shore home during the winter months dampen your holiday spirit. Create a festive, buyer-friendly environment with these 7 seasonal staging must do’s.

1. Before you start untangling your tinsel, make sure your holiday collection matches your current indoor decor.

2. Too many trimmings can be distracting, but the right accessories can draw attention to your home’s best features. As an example, try hanging a few (no more than five) tasteful ornaments from your mantel to highlight an elegant fireplace.

3. Go light on the lights outside…Leave the giant inflatable snowman in storage this year. One man’s “merry” is another man’s “tacky,” so tone down any over the top light displays.

4.  If you decide on adding a tree make sure the wide base won’t overwhelm the floor space.

5. Crank up the Heat! Cold temps present the perfect opportunity to create an inviting environment for potential home-buyers. Buyers will be grateful for a place to escape from the cold.

6.Offer accessible tasty treats..this is a great way to get buyers to stick around and check out your home.

7. The less-is-more mantra of home staging may tempt you to go without holiday cheer this year. But a few subtle touches like a pine cone centerpiece,  or even an evergreen wreath can add warmth anyone will notice as soon as they come through the door….CONTINUED

Gloria Matlin and team member Zack Matlin pride themselves on being top real estate resources; with Gloria’s experience with everything North Shore Real Estate for over 25 years.  Market trends, reports, lists of homes for sale, homes for rent, and general North Shore housing information is available 24/7 at  www.gloriamatlin.com or www.coldwellbankeronline.com. You may also stop into the highly awarded Coldwell Banker Residential Real Estate office where Gloria Matlin calls home base – 640 Vernon Ave, Glencoe, IL; for additional assistance/guidance.

 

 

Thinking of Selling? Top 5 Musts Before Listing: North Shore Real Estate

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North Shore real estate is well within the 2016 spring buying and selling season.  North Shore realtors may often advise clients of five basic principles to get your home in top “list ready” condition. Buyers and sellers alike are out rightspring now (on-line and in-person) perusing real estate options on places like Zillow and Trulia. Using these tips can promote a competitive standing in the market and make buyers appreciate the thoughtful preparation.

1. Go crazy on the curb appeal. Spring and summer mean getting out and enjoying the weather. It also means every detail of the outside of your home is far more noticeable.  Just put yourself in a potential buyers shoes and stand outside of your home. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly displayed? Is the address clearly visible from where you are? Are pretty flowers or plants framing the entrances? Is the walkway free from debris and impediments?

2. Clean and Organize. Eliminate any clutter and pack up your least-used items, such as large pictures or photos, out-of-season clothes, non-used kitchen items, toys, and exercise equipment. Store items off-site or in boxes neatly arranged in the garage or even the basement. Clean the windows, carpets, walls, flooring, lighting fixtures, and baseboards to make the house sparkle.

3. Collect needed replacement estimates. Do you have big-ticket items that are worn out, out dated, or will need to be replaced soon, such your roof or carpeting? Get estimates on how much it would cost to replace those things, even if you don’t plan to do it yourself. The figures will help buyers determine if they can afford the home, and will be a helpful guide for both parties when negotiations begin.

4. Know where to find your warranties. Collect the warranties, guarantees, and user manuals for the furnace, washer and dryer, dishwasher, and any other appliances or equipment that will remain with the house after it’s sold.

 5. A pre-sale home inspection is Key. Be ahead of the game by arranging for a pre-sale home inspection. An inspector will be able to give you a good outline of the trouble areas that will stand out to potential buyers, and you’ll be able to make needed repairs before an open house begins. The inspection may also be an additional guide for contact negotiation.

The top producing, high ranking  Coldwell Banker Residential Brokerage office located at 640 Vernon Ave in Glencoe, Illinois-60022; is home base for Gloria Matlin . The office has been a sound performing real estate resource for the North Shore community for well over 4 decades.  Stop by today to discover how we can assist with home buying, home selling, home rentals, reports, or just to get info on Chicago’s North Shore area things to do/ places to go or eat!

Real Estate Wisdom From Dad-North Shore Real Estate

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In the spirit of Father’s Day on Chicago’s North Shore and real estate near and far; advice that may come from Dad regarding life, money and real estate investing..

Do the math. Then do it again.. home purchase prices, various appreciate rates and rental income scenarios, interest rates, opportunity costs, vacancy buffers, landscaping and maintenance, insurance — every single line item goes into the hopper.

Have an exit strategy — and your backup A,B,C plans — before you buy. If you’re buying a North Shore home or any home to live in, Dads might say not to even start your house hunt without knowing how long you expect to be there and what your next move will be. In this way, you can be sure to buy a home that will work at least as long as your plan A is in effect. Of course, even the best-laid plans can be foiled by forces beyond your control, so Dads are big on putting plans B, C and on down the alphabet in place upfront, and not making the buy until you have accounted for these various outcomes.

Buy it right. Whether you’re hoping to buy a personal residence that appreciates over time or you’re investing in the market, Dads may say to buy at a price you can afford.

You won’t win them all. Striving for a perfect investment record of profits on top of profits is great, but it belies the reality of life that little is perfect. The more mature approach, a Dad’s approach, is to be grateful for the lifestyle of a homeowner and the returns of a real estate investor, understanding that the occasional investment may not go as planned. Having a seasoned real estate professional as a guide will help. More info HERE

Happy Fathers Day!

Real Estate Outcomes April2012: Chicago’s North Shore

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Property Sales

Top North Shore real estate selling reports state that now in May 2012 the previous month of April; Property sales were down -21.4% from April of 2011 and 37.5% higher than North Shore sales last month. April 2012 sales were at a mid level compared to April of 2011 and 2010. April YTD sales of 35 are running -27.1% behind last year’s year-to-date sales recorded.

Prices

The Median Chicago North Shore Sales Price in April was $766,500, down -1.1% from $775,000 in April of 2011 and down -21.1% from $972,000 last month. The Average North Shore-Glencoe Sales Price in April was $907,227, down -15.4% from $1,071,804 in April of 2011 and down -44.9% from $1,645,063 last month. April 2012 ASP was at the lowest level compared to April of 2011 and 2010.

Inventory & MSI

The Total Inventory and (monthly supply inventory or MSI) of North Shore Properties available for sale as of April was down -10.1% from last month and down -24.6% from April of last year. April 2012 real estate Inventory was at the lowest level compared to April of 2011 and 2010.
A comparatively lower MSI is more beneficial for sellers while a higher MSI is better for buyers. The April 2012 MSI of 8.1 months was at its lowest level compared with April of 2011 and 2010.

Market Time

The average Days On Market (DOM) shows how many days the average North Shore Property is on the Market before it sells. An upward trend in DOM tends to indicate a move towards more of a Buyer’s market, a downward trend a move towards more of a Seller’s market. The DOM for April was down -10.9% from last month and up 1.8% from 112 days in April of last year. The April 2012 DOM was at its highest level compared with April of 2011 and 2010 real estate reporting.

 Inventory / New Listings / Sales

The last view of the North Shore real estate market combines monthly inventory of Properties for sale along with listings and sales analysis. The graph above shows the basic annual seasonality of the market as well as the relationship between these items. The number of New North Shore Listings in April 2012 was 27, down -18.2% from last month and down -28.9% from  April of last year reporting figures

Gloria Matlin can be found at the Glencoe, Illinois Coldwell Banker Residential Brokerage office located at 640 Vernon Ave, 60022. The office can provide detail on this and other market reports. Feel free to use us as a trusted resource for North Shore Real estate questions about homes for sale, homes for rent, or property financing options.  We have been a top producing, top selling real estate example for well over 45 years.

My Joys in North Shore Real Estate: Glencoe Top Selling Realtor

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Good North Shore real estate news goes hand in hand with spring and summer-time anticipation! Recent North Shore housing reports support that this is one of the best times in history to buy or sell. I am excited about sharing this news with new and repeat home buyers. Mortgage interest rates are at an all time low, and home prices are incredibly attractive! Those factors create positive projections well into 2012, and help to ensure my expertise in new construction and luxury residences is well utilized. I gain a tremendous amount of joy knowing that I can offer real estate services that are welcoming to both buyers and sellers. As a North Shore Realtor, as well as a member of the North Shore community, and proud mother of a New Trier School District Alum; this area shows an abundance of real estate progress in the last few months. This spring surge is typical in a cyclical housing market with activity levels running high when the weather gets even warmer. However, this year’s spring surge is strong and came earlier than last year. Home buyers appear motivated to get back in the market, this is a robust time and I sense the momentum will continue well into the summer! I encourage potential buyers, sellers, and investors to review the supporting data, it speaks volumes. 

For buyers– Keep in mind that with increased interest in the market brings competition. To increase your chances of finding your dream home in a market that may be competitive, and to decrease the odds of you losing out to another buyer:

Review new listings. Check out web sites such as REALTOR.com, Trulia, or Zillow. Browse your local newspaper’s real estate section, and drive through the neighborhood to spot For Sale signs. If you see a home you like, write down the address and your North Shore Realtor will schedule a showing.

Maintain contact with your North Shore Realtor to find out about the newest listings in your ideal area. Be ready to see a house as soon as it goes on the market — if it’s a great home, it will go pretty fast.

Overlook a buying frenzy. Just because there may be competition doesn’t mean you should just buy the first thing you see. And even though you could make your offer attractive, don’t overlook inspections or due diligence that help ensure that your dream house is sound.

Be confident and ready to make a decision. Spend a lot of time in advance deciding what are “must haves” or deal breakers, so you won’t be unsure when you have the chance to make an offer.

For Sellers selling a North Shore home or any home for that matter commonly requires that you have several forms, reports, mortgage documents, policies, deeds, and settlement statements all in order. A knowledgeable and experienced North Shore real estate expert will help you prepare the best deal, and avoid delays or costly mistakes. A few pre-selling tasks to note:

Notice curb appeal. Pretend you’re a buyer and stand in front of your home. As you approach the front door, what is your first impression of the property? Do the lawn and bushes look neatly maintained? Is the walkway clearly seen? Are pretty objects framing the entrance?

What are your thoughts on this subject?  I look forward to hearing from you!

My North Shore Coldwell Banker Residential real estate office is located in Glencoe, Illinois-640 Vernon Ave. Stop in for help or questions on buying, selling, renting or local area information/mapping.

 

Top 12 Ways to Hold a Successful Garage Sale: North Shore Real Estate

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From the point of view of  many as well as several North Shore realtors, garage sales can be a great way to get rid of clutter, organize your home — and earn a little extra cash all at the same time, before selling a home. Tis’ the season to sell during spring, but make sure the timing is right. Garage sales can become overwhelming and take on a life of their own. It might not be the best use of energy right before putting your home on the market. Follow the guide below to determine what is best:

  1. See if neighbors want to participate. You can turn your garage sale into a block-wide occasion and attract more shoppers if you team up with neighbors. However, a permit may be necessary for each home owner, even if it’s a group event.
  2. Plan the sale. Sales on Saturdays and Sundays will produce the most traffic, especially if the weather cooperates. Start the sale early, 8 a.m. or 9 a.m. is best, and be prepared for early birds.
  3. Don’t Procrastinate. You don’t want to be scrambling to hold a garage sale the week before an open house. Depending on how long you’ve lived in the North Shore home and how much stuff you have to sell, planning a garage sale can demand a lot of time and energy.
  4. Du Diligence-get a permit. Most municipalities will require you to obtain a special permit or license in order to hold a garage sale. The permits are often free or very inexpensive, but still require you to register with the city/village.
  5. Market-Advertise. Place an ad in free classified papers and Web sites, and in your local North Shore newspapers. Include the dates, time, and address. Let the public know if certain types of items will be sold, such as baby clothes, furniture, or weightlifting equipment. On the day of the sale, balloons and signs with prominent arrows will help to grab the attention of passersby.
  6. Label and price items well. Lay out everything that you plan to sell, and attach prices with removable stickers. Remember, garage sales are supposed to be bargains, so try to be objective as you set prices. Assign simple prices to your goods: 50 cents, 3 for $1, $5, $10, etc.
  7. If it’s junk, don’t sell it. Decide what’s worth selling and what’s not. If it’s really garbage, then throw it out. Broken appliances, for example, should be tossed. (Know where a nearby electrical outlet is, in case a customer wants to make sure an item works.)
  8. Check for errors.  Make sure that items you want to keep don’t accidentally end up in the garage sale pile.
  9. Have bags and newspapers ready. People who buy items will appreciate a bag to carry their goods. Newspapers are handy for wrapping fragile items.
  10. Have an organized display. Lay out your items by category, and display neatly so customers don’t have to dig through boxes.
  11. Handle money matters. Make a trip to the bank to get ample change for your cashbox. Throughout the sale, keep a close eye on your cash; never leave the cashbox unattended. It’s smart to have one person who manages the money throughout the day, keeping a tally of what was purchased and for how much. Keep a calculator nearby.
  12. Get ready to sell your home. Donate the remaining stuff or sell it to a resale shop. Now that all of your clutter is cleared out, it’s time to focus on preparing your house for a successful sale!

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