A rustic cabin. a seaside cottage. Has it been a lifelong dream of yours to own a second home? Buying a vacation home can be an alluring prospect. Before you decide to purchase one, though, you should consider a number of issues. These include the costs associated with owning a second/vacation home, the attributes of the home, its rental potential, and the income tax treatment.
Although the the recent Tax Cuts and Jobs Act bill of 2017 certainly offers its fair share of complexity, it also presents a tremendous opportunity that many high-net-worth households don’t fully understand. This opportunity surrounds an individual’s (or couple’s) ability to transfer significant portions of wealth tax-free today vs. at death.
If a taxpayer is making charitable donations, and that potential deduction, along with their state and property taxes and their mortgage interest do not exceed their Standard Deduction, then they are not receiving a tax benefit for that charitable donation. One strategy is to “bunch” donations to charities in specific years, while limiting donations in other years.
In tax lingo, your principal residence is the place where you legally reside. It’s typically the place where you spend most of your time, but several other factors are also relevant in determining your principal residence. Many of the tax benefits associated with home ownership apply mainly to your principal residence — different rules apply to second homes and investment properties. Here’s what you need to know to make owning a home really pay off at tax time.
This year saw one of the largest tax reforms in over three decades. Two of the major changes – an increase in standard deductions and reduced/eliminated itemized deductions – have taxpayers seeking new methods to reduce their tax bills. Although having been around for over a decade, Qualified Charitable Distributions (QCDs) have been reintroduced to the spotlight in 2018 as a strategy to reduce taxable income for retirees.
The Tax Cuts and Jobs Act, effective as of 2018, is the largest tax reform to take place since the 1980’s. What does this mean for your tax planning?
We’ve been saying for a long time that the market was statistically due for a sell-off and an increase in volatility. After experiencing historically low levels of volatility throughout 2017, the first quarter of 2018 was the polar opposite, with heightened volatility experienced, particularly in February and March.
This is a brief summary of the significant changes to estate tax laws and 529 Plans this year, provided by Kenneth E. Devore & Associates.
Expected passage of the tax law changes are expected to happen and be signed into law with an effective start date of January 1, 2018. Much has been written on this subject in the press and here is how we view the changes in a simplified way.
Congressional Republicans have reached an agreement to merge the House and Senate tax bills.