Jennifer Peterson SoCal Realtor DRE #02079239

I wanted to share 10 fantastic tax breaks for home owners or homebuyers! Take a look at these and then discuss with your accountant. This information comes from my accountant at Robert Hall and Assocuates. If you’d like me to connect you with them just direct message me. Happy to do so!

10 Tax Breaks for Homeowners and Home Buyers:

Owning or buying a home can be a significant financial burden, but there are several tax breaks that homeowners can take advantage of to reduce costs. Robert Hall & Associates is here to help you understand these opportunities and maximize your savings.

1. Using 401(k) or IRA Funds to Buy a Home

If you're looking to buy a home, you might consider tapping into your 401(k) or IRA for a down payment. Traditional IRA holders can withdraw up to $10,000 without a 10% penalty, while Roth IRA holders can withdraw contributions anytime and up to $10,000 in earnings (if the account is at least five years old) without penalties. If using a 401(k), you can take out a loan up to 50% of your balance (not exceeding $50,000), typically payable within five years.

2. Mortgage Interest Deduction

Homeowners can deduct mortgage interest on loans up to $750,000 ($375,000 if married filing separately). This deduction applies to the purchase, building, or significant improvement of a primary or secondary home.

3. Mortgage Interest Credit

Lower-income homeowners with a Mortgage Credit Certificate (MCC) may qualify for a credit of 10% to 50% of their mortgage interest (up to $2,000 per year). If your credit exceeds the limit, you can carry it forward for up to three years. Keep in mind, if you refinance, you'll need a new MCC.

4. Credits for Energy-Saving Home Improvements

Homeowners can claim a 30% credit for qualified energy-efficient improvements made in 2023, including energy-efficient windows, doors, and heat pumps. Annual limits apply, such as a $1,200 limit for energy property costs and a $2,000 limit for qualified heat pumps and biomass stoves.

5. Credit for Electric Vehicle Charging Equipment

The federal tax credit for EV chargers is worth 30% of the costs of the qualifying equipment, up to $1,000. This also includes bidirectional charging equipment, which supports energy flow from the vehicle back to the grid.

6. Tax Deduction for Medically Necessary Home Improvements

If you need to make home modifications for medical reasons—like installing ramps or handrails—these expenses may be deductible. Deductions apply only if costs exceed 7.5% of your adjusted gross income, minus any increase in property value.

7. Property Tax Deduction

Homeowners who itemize deductions can deduct property taxes paid, along with state and local income taxes or sales taxes, up to $10,000 ($5,000 for married filing separately).

8. Forgiveness of Debt on a Foreclosure or Short Sale

If a mortgage debt is forgiven during a foreclosure or short sale, up to $750,000 ($375,000 if married filing separately) of that debt may be tax-free, provided it was for your principal residence.

9. Capital Gain Exclusion When Selling Your Home

When selling your home, you can exclude up to $500,000 ($250,000 for single filers) of capital gains from taxation if you owned and lived in the home for at least two of the last five years. Certain exceptions apply for unforeseen circumstances.

10. Increased Basis When Selling Your Home

If the capital gains exclusion doesn’t fully eliminate your tax, you can reduce your taxable gain by increasing your home’s basis. This includes costs related to purchasing, building, or improving your home.

Navigating these tax breaks can be complex, but our team here at Robert Hall & Associates is always here to help. There are some limitations and restrictions so contact us for personalized advice tailored to your specific situation.
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New on the Market

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Just Sold in Van Nuys, Los Angeles at 14124 W Monroe PL!

Grateful for all the wonderful people I met in 2023, and wishing everyone a safe and prosperous new year! ❤️❤️❤️

14124 Monroe Place, Van Nuys, CA, 91405 - OPEN HOUSE Learn more about 14124 Monroe Place, Van Nuys, CA, 91405. This home is priced at $849500, with 3 beds, 4 baths, and…

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Upcoming Open House

Open House on Sat, Dec 9 01:00 PM in Van Nuys, Los Angeles at 14124 W Monroe PL

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SUNDAY, 1-4

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New on the Market

New Listing in Van Nuys, Los Angeles at 14124 W Monroe PL

Mortgage Rate Update for week of 11/27/2023. Happy Holidays!

Real Estate Market Insider 11/27/2023 While potential homebuyers continue to hold out for lower rates and more inventory, some light is glimmering at the end of this very long tunnel...

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Hi everyone! All these homes in Long Beach have gone on the market in the last 5 days (as of Friday, September 22nd). Reach out to me if you would like to take a look or if you would like to see a list of new homes in your Los Angeles area. 818-203-5234.

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What is a 9-A Report? I am asked this a lot so thought I would add the information here! As soon as I take a listing I order the 9-A Report for my sellers, as the city can take a while to get it done and you never want this to hold up an Escrow.

The Info!

Ready to sell your property in Los Angeles? Well, hold tight because first, the city of LA requires certain conditions to be met before a property can be sold. As a seller, you will need to fill out a 9A report.

What is a 9A Report?
A residential property report, also known as a 9A Report, provides buyers information about the property. An application (filled out by the seller) must be completed and include declarations that the property IS or WILL BE compliant in accordance with City of LA requirements.

The residential property report/9A report also informs buyers about any pending or specials assessments regarding the property. The City of Los Angeles might add other items to the report to ensure properties adhere to code requirements. The city might also want to disclose if additions to the property will be coming based on their plans like sidewalks, etc.

Who orders a 9A report?

The seller orders the report and must provide it to the buyer prior to selling or going into escrow. The cost is $70.82 and can typically be part of a seller's closing cost. Once the application is complete and the fee is paid, it is sent to building and safety followed by the City issuing the report.

Below is an overview of the requirements for the City of Los Angeles when selling residential or commercial buildings.

Overview of Los Angeles 9A Requirements

SEISMIC GAS SHUT-OFF VALVES
All Commercial and Residential buildings containing fuel gas piping must have an Earthquake Shut-Off Valve (EQSO). They are designed to shut off gas service automatically, in the event of a magnitude 5.4or greater earthquake. (Section 94.1217 L.A.M.C)

WATER CONSERVATION DEVICES
Any Commercial or Residential building containing plumbing fixtures shall comply with the City of LA's Water Conservation Ordinance. (Section 122.03 L.A.M.C)

SECURITY LIGHTING & LOCKS
All apartment buildings containing three or more dwelling units shall be equipped with security lighting and locks.(Section 91.8607 L.A.M.C)

METAL BARS
Every sleeping room below the fourth floor shall have at least one operable window or door that is approved for emergency escape or rescue. (Section 91.029.4 L.A.M.C)

SMOKE DETECTORS
Smoke Detectors are required in every sleeping room and at a central location of the existing corridor or area giving access to these rooms.(Section 91.8603 L.A.M.C)

SAFETY GLAZING
Existing glass on every sliding glass panel, other than wardrobe doors, bathroom showers requires impact hazard glazing, or an approved film maybe installed. (Section 91.601; Section 96.302 L.A.M.C)

CARBON MONOXIDE DETECTORS
Required in every home with a fuel-burning appliance and for any home with an attached garage. Installed on each floor adjacent to sleeping areas. ( Section91.8603 L.A.M.C)

What can I expect to pay?

SHUT-OFF VALVES
Shut-off valves with City of LA permit can range from $389 +

WATER CONSERVATION DEVICES
Toilet + Seat Installation: $289

Toilet Installation Only: $179

Low Flow Shower Head installation: $25

SMOKE DETECTORS
10-Yr Battery Operated Smoke Alarm: $49

Hardwired Smoke Alarm Replacement: $59

Installation of New Hardwired Smoke Alarm: $159

SAFETY GLAZING
Safety Glazing: $150+

Existing Tint Removal: $99

CARBON MONOXIDE DETECTORS
Carbon Monoxide Alarms: $49

Hardwire Carbon + Smoke Alarm Combo Replacement: $94

Hardwire New Carbon + Smoke Alarm Combo: $208

*NUMBERS PROVIDED ARE ESTIMATES PLEASE CONSULT WITH YOUR VENDOR*

NEW LISTING! ❤️ 14126 W Monroe PL, Van Nuys, CA. Gorgeous tri-level 3 bed/4 bath home with tons of upgrades. Built in 2019! Turnkey and oh so fabulous. Contact me for details. Listing Agent Jennifer Peterson DRE 02079239 818-203-5234.

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Upcoming Open House

Open House on Sun, Jul 23 01:00 PM in Van Nuys, Los Angeles at 14126 W Monroe PL

Upcoming Open House

Open House on Fri, Jul 21 12:00 PM in Van Nuys, Los Angeles at 14126 W Monroe PL

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Explore 14126 W Monroe Pl - Van Nuys CA in 3D Matterport 3D Showcase.