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Homeowners avoid tax on $1 million capital gain

By Benny Kass, Monday, May 12, 2008.

DEAR BENNY: Friends of mine recently sold their home they owned for 22 years for $1.5 million; they paid about $500,000. They told me that they did not have to pay any capital gains tax, because their tax advisor claimed that they must have spent at least $1 million on improvements over the 20 years they owned it, although they did not have any records. He told them that it was within IRS guidelines, and their tax return was accepted without any problems. more...

Lender not happy putting wife's name on title

By Benny Kass, Thursday, May 8, 2008.

Q: My husband wants to put my name on the deed to his house. Because he obtained the mortgage a long time before our marriage, we have been told by the mortgage company that the only way my name can be added is by refinancing. Is there any other way to add my name to the title? We are prepared to pay off the mortgage if -- and only if -- I can be on the title, too. more...

Home-sale commissions too high, seller says

By Benny Kass, Monday, May 5, 2008.

DEAR BENNY: I had my home priced under the market price and recently took it away from the brokers so I could lower the price even more. Why? Well, I have a beautiful, wonderfully priced home and did not get any offers.

In this period of downturn in the real estate market, each week we are told, "Price your house under the market value or pull it off the market." more...

Vacation ownership interests: Deal or no deal?

By Benny Kass, Thursday, May 1, 2008.

Q: On a recent vacation to the Caribbean, we were approached by a young woman who wanted us to buy into a vacation ownership. According to this salesperson, for the money that we would give them, we would get a number of points, which could be used for vacations in a number of desirable hotels and cities throughout the United States. This was interesting to us, but we did not know enough about the transaction and opted not to buy. Can you provide some guidance on this concept? Is it a good deal? more...

When selling home, ask buyer for at least 5% deposit

By Benny Kass, Monday, April 28, 2008.

DEAR BENNY: We recently sold our home (in Maryland), and had a ratified contract. The homeowners association (HOA) documents were delivered and received by the buyer, and the inspection was completed. All the "i's" were dotted and "t's" crossed. more...

No real benefit to paying off mortgage

By Benny Kass, Thursday, April 24, 2008.

Q: Our condominium unit is now worth approximately $350,000, and we owe only $25,000 on our mortgage. We are from the old school, and want to own this property free and clear. We have the money, and are considering paying off the loan. Is this a good idea, and if so, how do we go about making sure that it is done correctly?

A: The old school is a reference to our parents (or grandparents) who lived through the recession in the 1930s. Because the stock market crashed, and lots of people were unemployed, those who owned their home free and clear of any debt at least had a roof over their head and did not have to sleep in the streets or under the bridges. more...

Dos and don'ts of holding home's title in LLC

By Benny Kass, Monday, April 21, 2008.

DEAR BENNY: I own several single-family rental homes .In talking to advisors, one says I should put the houses into LLCs for liability protection. Another said, don't bother. If you get sued, your liability protection on your homeowners policy plus your umbrella policy will cover you. Obviously, the latter provides only attorney and possible judgment costs, but does the LLC really keep you from being sued, or protect you if you are sued, so that you would not need to use the umbrella policy? --Bruce more...

Upon death, father wants no title problems for kids

By Benny Kass, Thursday, April 17, 2008.

Q: My mother died a couple of months ago, and my dad wants to make sure that title to his house is in his name. How do we determine the status of title? Dad wants to make sure that upon his death, his three children will not have any problems regarding the house.

A: First, while I am sure that your motives are pure, you have to remember that the decision on where to distribute your dad's assets when he dies is his -- and his alone -- to make. more...

Major documents every homeowner should create

By Benny Kass, Monday, April 14, 2008.

DEAR BENNY: My aunt, age 83, has no other living relatives than my sister, my two brothers and me. She is completely reluctant to make out any of these documents: a last will and testament, a durable power of attorney, a power of attorney for health, a living will (advanced health-care directive) and a power of attorney for financial matters. I believe she should have them all. Could you tell me the consequences of not having each one of these? more...

Legal rights when neighbor's tree threatens property
By Benny Kass, Friday, April 11, 2008.

If the roots of your neighbor's tree are causing damage to your property, what legal rights do you have? Unfortunately, it depends on where you live.

Over the centuries, our country has grown from a largely agricultural setting to an urban civilization. As a result of these changes, different states have adopted different rules regarding tree law and liability. more...

City reneges on promise to allow homeowner's garage
By Benny Kass, Monday, April 7, 2008.

DEAR BENNY: In 1995, I bought my house, which had many problems between the former owner and the city. He built the garage for the house without any permit or city codes. The former owner lost the house and before I bought the house I had a meeting with the city staff and I agreed to buy and rebuild it according to the city codes. more...

Understanding Starker exchange rules
By Benny Kass, Thursday, April 3, 2008.

(This is Part 5 of a five-part series. Read Part 1, "IRS debunks common tax myths"; Part 2, "Homeowners get good tax news for 2007"; Part 3, "How to deduct mortgage interest, points on taxes"; and Part 4, "Home sellers keep profits, avoid taxes.")
"The difference between death and taxes is death doesn't get worse every time Congress meets." --Will Rogers

In this series of tax articles, I have discussed the tax benefits for residential properties, such as the exclusion of gain of up to $500,000, or the various tax deductions available to homeowners. more...

Will refinancing to lower rate really save money?
By Benny Kass, Monday, March 31, 2008.

DEAR BENNY: I bought my condo 18 months ago. The interest rate on my 30-year loan is 6.25 percent. Should I consider refinancing to a lower rate? I plan on staying here and paying off the loan so it seems even if I save some money on a lower interest rate I will be extending my loan and paying more/longer? --Scott

DEAR SCOTT: Since you've had your loan for a relatively short time, the costs to refinance your loan may not outweigh the benefits of a lower interest rate. more...

Home sellers keep profits, avoid taxes
By Benny Kass, Thursday, March 27, 2008.

(This is Part 4 of a five-part series.)

"The taxpayer: that's someone who works for the federal government but doesn't have to take a civil service examination." --Ronald Reagan

Q: How can I make a profit of $500,000 and not have to pay a penny in capital gains tax?

A: Buy a house with your spouse, live in it for at least two years, and file a joint return. Of course, the house has to increase significantly in value. more...

Tips on selling home to 'quick cash' company
By Benny Kass, Monday, March 24, 2008.

DEAR BENNY: Can you advise me about selling to one of the companies that advertise that they buy houses in "as is" condition, for cash, quickly, and with no closing costs. My mother passed away in March 2007 and as the executor of her estate, I am now preparing to put her home up for sale. Due to the current poor market situation, in order to settle her estate within the next six months, I am considering doing this, but I'd like to know the pros and cons of disposing of her house this way. more...

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