Happy New Year!

Deductions for Homeowners

What's Deductible? -- A to Z

Acquisition debt. See Mortgage interest.

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Boats as homes. A boat that has eating, sleeping and sanitary facilities can qualify as a first or second home, so you can deduct mortgage interest paid on the loan secured by the boat to buy it. However, if you are subject to the alternative minimum tax, this write-off is not allowed.

Cancelled debt on foreclosure or short sale. Generally, when a debt is canceled or forgiven, the borrower is considered to have received taxable income equal to the amount of the canceled debt. However, through 2012, up to $2 million of debt discharged on a mortgage on a principal residence -- in a foreclosure, for example, or short sale -- can be tax-free.

Casualty loss. If your home was damaged or destroyed -- by fire or storm, for example -- you may be able to get financial help from Uncle Sam by deducting a casualty loss on your return. Your deduction for a 2010 loss is generally the total of your unreimbursed loss reduced by $500 100 and further reduced by 10% of your adjusted gross income.

Depreciation on home. Profit due to depreciation claimed on your residence before May 7, 1997 -- because you had a home office, for example, or at one time rented out the property -- qualifies for the rule that lets you treat $250,000 of home sale profit as tax-free income. (The limit is $500,000 if you're married and file a joint return.) Profit due to depreciation after May 6, 1997, is taxed at 25%, unless you're in a lower tax bracket, in which case that rate applies.

Discharged debt. See Cancelled debt on foreclosure or short sale.

D.C. first-time homebuyer credit. If you bought a home in the nation's capital during 2010, you may be eligible for a $5,000 tax credit. It doesn't really have to be your first home ... just a home you purchased in the District of Columbia after not owning one in D.C. for at least one year. It doesn't matter if you have owned a home elsewhere. This break phases out as income exceeds $70,000 on single returns and $110,000 on married filing jointly returns. See first-time homebuyer credit. If you bought during the part of 2010 when the nationwide homebuyer credit was available (see below), you must choose between the two credits. You can’t claim both.

Energy credits. You can earn a 2009 tax credit for installing energy-saving home improvements such as new doors, new windows, energy-efficient furnaces, heat pumps, hot water heaters, air conditioners, etc. The credit is 30% of the cost of installing such energy savers, up to a top credit of $1,500. For windows and doors, the credit is based on the cost of the materials; for furnaces and air conditioners and the like, you can count the cost of installation, too. A bigger credit is available for more ambitious projects – like solar hot-water heating systems, geothermal heat pumps and, yes, even residential wind energy systems. Start generating your own power and Uncle Sam will rebate 30% of the full cost of your system…with no dollar cap.

First-time homebuyer credit. If you bought a home during the first four months of 2010, you may qualify for either an $8,000 or $6,500 home buyer credit. And, you don’t really have to be a first-time home buyer to qualify for either credit. To qualify for the $8,000 credit you (and your spouse if married) must not have owned a home in the three years leading up to the purchase of your new home. The credit is 10% of the purchase price of the home, up to a maximum credit of $8,000. No credit is allowed for homes that cost more than $800,000.

To qualify for the $6,500 credit, you must be a long-time homeowner, defined as owing and living in the same principal residence for five of the eight years leading up to the purchase of your new home. The credit is 10% of the purchase price of the home, up to a maximum credit of $6,500. No credit is allowed for homes that cost more than $800,000.

Timing is everything. To qualify for either credit, you must have signed a binding contract on your new home before May 1, 2010, and you must have closed on the deal by September 30, 2010.

Unlike a first-time home buyer credit available in 2008 – which had to be paid back over 15 years by adding $500 in each of those years to the taxpayer’s tax bill – the 2010 credit does not have to be paid back, as long as you live in the principal residence for at least three years.

First-time homebuyer credit repayment. The $7,500 first-time homebuyer credit that was available for qualifying purchases after April 8, 2008, and before January 1, 2009, must be repaid starting with your 2010 tax return. To repay this “interest-free loan”, you must add $500 each year to your tax bill until the full $7,500 is repaid. If you sell or otherwise stop using the house as your home before the credit is fully repaid, any remaining balance must be repaid with your tax return for the year of the sale.

Foreclosure. See Cancelled debt on foreclosure or short sale.

Home-equity debt. Interest on up to $100,000 of debt secured by your first or second home -- using a second mortgage, say, or home equity line of credit -- can be deducted, regardless of how the money is used. The use of home-equity debt gives homeowners an opportunity to skirt the rules that generally block the deduction of debt used to buy automobiles, for example, or pay for vacations.

Home-office deduction. You can deduct the costs of a home office that you use exclusively and regularly for business. This includes depreciation, utilities and insurance for the office portion of your home. To qualify for the tax break you must either meet with clients there regularly, or the home office must be your principal place of business (unless it is not attached to your house).

Home-sale exclusion. Up to $250,000 of profit from the sale of your home can be tax free; $500,000 if you are married an file a joint return. To qualify, you must own and live in the house for periods totaling two years out of the five years leading up to the sale. A reduced exclusion is available if you fail the two-year test due to unforeseen circumstances such as a move resulting from a job change, for example, or divorce. You can use this exclusion any number of times but no more frequently than once every two years.

IRA payouts for first-time homebuyers. You can withdraw as much as $10,000 from a traditional IRA before age 59½ without penalty if the money is used to buy the first home for yourself, a child or grandchild, or your parents or grandparents. Although the payout avoids the normal 10% early-withdrawal penalty, it is taxed. Different rules apply to tapping a Roth IRA for the purchase of a home. See Roth IRA payouts for first-time homebuyers.

Loan prepayment penalties. If your lender charges you a penalty for prepaying your mortgage early, the charge is deductible as mortgage interest.

Mortgage interest. You can deduct interest on up to $1.1 million of loans used to buy or build or improve your first or second home and secured by the property. Up to $1 million of such debt is called acquisition debt, which must be used to acquire or improve the property, and up to $100,000 more is called home equity debt, which can be used for any purpose.

Mortgage interest credit. If you received a mortgage credit certificate from a state or local governmental agency, you can claim a tax credit of up to $2,000 of mortgage interest paid.

Moving expenses. If a move is connected with taking a new job that is at least 50 miles farther from your old home than your old job was, you can deduct travel and lodging expenses for you and your family and the cost of moving your household goods. If you drive your own car, you can deduct 24 16.5 cents a mile for 2009 2010 moves. (For 20102011, the standard mileage rate for moving is 16.519 cents a mile.) If you moved to take your first job, the 50-mile test applies to the distance between your old home and your new job. The deduction is allowed even if you do not itemize deductions.

Parsonage allowance. For members of the clergy, the value of a home provided by the church is a tax-free fringe benefit. A housing allowance is also tax-free.

Points. Points you pay to get a mortgage for your principal residence are generally fully deductible in the year paid, even if you persuade the seller to pay your points for you. They are not deductible if paid as part of a refinancing a mortgage on your principal home or on a second home; in that those cases, you deduct the points over the life of the loan.

Presidentially declared disaster. If your home was damaged or destroyed in an area that the President declared a disaster area, special rules apply to the casualty loss deduction. For one thing, for 2009 losses the law waives the requirement that you reduce your loss by an amount equal to 10% of your adjusted gross income to arrive at the deduction. And, youYou may choose to deduct your loss in the year it occurred or the previous year, whichever is more advantageous. If you claim a 2010 loss on a 2009 amended return, for example, you’ll get your tax savings via a refund check from the IRS.

Property taxes. See Real estate taxes.

Real estate taxes. You can deduct state and local real estate taxes paid during the year on any number of personal residences you own. (A 2009 break that allowed homeowners who claimed If you choose to claim the standard deduction rather than itemize deductions, you canto boost their standard deduction to include some of the property tax they paid was not renewed for 2010.)add $500 if single or $1,000 if married filing jointly to the regular standard deduction amount if you paid at least that much in state and local real estate taxes. If you own rental properties, real estate taxes on them are deducted on Schedule E where you report rental income.

Real estate taxes when you buy a home. If you bought a home during the year, check to see if the seller had prepaid property taxes for a period you actually owned the home. If so, include that amount in your property tax deduction for the year . . .even if you did not reimburse the seller.

Recreational vehicle. If your RV has cooking, sleeping and sanitation facilities, interest on a loan used to buy it can qualify as deductible mortgage interest on a first or second home. If you are subject to the alternative minimum tax, interest on an RV loan is not deductible.

Refinancing points. Generally, points paid when refinancing are deducted over the term of the loan. But if you refinanced a loan that you previously refinanced, you can deduct in full the as-yet-undeducted points remaining on the prior loan. There's a catch, however: If you refinanced with the same lender, the remaining points must be amortized over the term of the new loan.

Rehabilitation credit. If your residence is certified by the government as a historic building, you can claim a tax credit for 20% of the cost of renovating it. The renovation must be substantial, and the expenses must be incurred within a 24-month period.

Reverse mortgage. Amounts received under a reverse mortgage -- either a lump sum payment or periodic payments -- are tax free. Interest that accrues on a reverse mortgage is not deductible until it is paid, and then only interest on up to $100,000 of debt can qualify.

Roth IRA payouts for first-time homebuyers. Because the rules for the Roth IRA allow you to withdraw contributions at any time without penalty, the Roth can be a powerful tool for saving for a first home. Say you and your spouse each put $5,000 a year into a Roth for five years. The entire $50,000 could be withdrawn tax- and penalty-free for a down payment and, because the accounts have been opened for at least five years, up to $10,000 of earnings can be withdrawn tax- and penalty-free if used to buy your first home.

Serial refinancers.If you refinanced in 2010 and paid off a home mortgage you acquired when refinancing to pay off an earlier mortgage, any as-yet-undeducted points on the previous refinancing may be deductible on your 2010 return. See Refinancing points.

Tax-free profit. See Home sale exclusion.

Tax-free profit on vacation home. Because you can use the home-sale exclusion repeatedly, it's possible to make profit on a vacation home tax free. If you move into the place and live there for two of the five years prior to selling it, you can qualify to claim up to $250,000 of profit tax free (up to $500,000 if you are married and file a joint return).

A recent change in the law, however, has diluted the potential value of this break. For vacation homes converted to principal residences after December 31, 2008, a portion of the gain will be taxed. The taxable part will be based on the ratio of the time after 2008 when the house was a second home or a rental to the total time you owned it.

Tax-free rental income. If you rent out your home for 14 or fewer days during the year -- when there's a major sporting event or political convention in your hometown, for example -- the rental income is tax-free, regardless of how much you make.

Vacation home. Mortgage interest on your second home is deductible, just as it is for your principal residence. Property taxes can be deducted on any number of homes. If you rent the place for 14 or fewer days during the year, the rental income is tax-free to you. If you rent it for more than 14 days a year, you must report the income, but also may claim deductions for rental expenses.

Creating a pet friendly home

A pet-friendly home is not just a fun and safe space for your pet, but also a space that can stand up to...the kinds of things pets do to houses. Making pet-friendly choices in landscaping, design, and the materials you use will ensure that both you and your pet can enjoy your shared space together.

Opt for durable flooring 

Even if your pet is perfectly well house-trained, they're bound to have an accident or two. Choose a flooring material that's easy to clean and won't be damaged by accidents. Linoleum cleans easily and is naturally anti-microbial. Bamboo, cork, tile, and stone are also good picks. If you want carpet, try a modular kind, made of separate carpet squares. Buy back-up squares so if a section gets ruined, you can pop it out and replace it. Avoid wood and laminate floors. Wood is easily scratched and damaged by water and slippery laminate can cause injuries.

Choose pet-friendly materials and décor

Opt for satin paint instead of flat paint on walls. A glossier finish won't show stains as prominently and wipes clean. Chose low VOC (volatile organic compounds) paints, especially if your pet bites or licks walls. Match the colors of throw rugs, upholstery, and other décor to your pet's fur color to give yourself a little more leeway in how frequently you'll be vacuuming and de-furring the furniture. Set up a feeding area in a spot where you won't be accidentally kicking over the water bowl. Find a nearby place to store dog food, ideally in a sealed container, like a plastic bin or a metal garbage can with a lid.

Protect furniture

Choose upholstered pieces covered in tough, easily-cleaned fabrics like leather or ultrasuede. Consider washable slipcovers, throws to protect furniture, or extra-durable fabric designed especially for pet owners. Keep pets from chewing furniture by spraying with store-bought, anti-chewing spray or applying a bit of cayenne pepper to their favorite biting spots. If you need to keep a pet out of a particular area, put up baby gates and provide the pet with plenty of sturdy toys for diversion. Set up a special bed or blanket so your pet has a comfortable, cushiony place of his own.

Eliminate dangers around the house

Walk around your house and assess possible pet hazards. Move chemicals and cleaning materials to high shelves or locked cabinets. Make sure trash cans are safely secured so pets don't get into something that could be harmful to them. (Many common household articles are toxic to pets including: coffee grounds, onions, grapes, and even nutmeg.) Latch lower cabinets with child locks if necessary and keep curtain and electrical cords out of pet reach. Put screens in upper level windows and make sure they're intact and securely attached. Keep toilet lids closed and avoid automatic bowl cleaners. Wipe up spills in the driveway and garage immediately so pets don't ingest poisons like antifreeze. Remove any indoor plants that are toxic to pets. You can find a list of toxic and non-toxic plants on the Humane Society's web site (www.humanesociety.org).

Consider a pet door 

If you are frequently away from home, consider putting in a pet door. Pet doors can be put in windows, doors, and walls. Smart models recognize your pet electronically and will only open for them, not for other animals. The doors can be controlled remotely and deactivated if you need the pet to stay inside. If you're worried about the resale value of cutting a hole in the wall, consider a model that's built into a glass sliding door. When you sell, you can replace that part of the door with a regular slider.

Create a yard for pets and people to share 

Find safe, pet-friendly materials for plants and hardscape. Put in some mint or catnip for cats and a clover ground cover for dogs because it won't yellow with urine. Outdoor cats like places to hide and things to climb and will make good use of trees and bushy areas. Dogs instinctively patrol the perimeter of the property and like running paths that follow the yard's circumference. If your dog has already created a path, embrace it, covering it with mulch and lining with attractive plantings. Make sure your fence is in good condition with no secret ways out (including benches, large rocks, or other items that can serve as pet launching pads). Consider putting in a small eye-level panel in the fence so dog can peek out and keep a watch on things. For safety, keep sharp tools put away, keep compost bins covered, and avoid chemical like fertilizers and pesticides. Make sure plants are non-toxic and avoid plants with thorns. And pets like a lot of the same things humans like, so you'll both be pleased if your yard has a shady spot to cool off and comfy places to sit



Environmentally Friendly Products for your Home

The green home movement has been spreading, but many homeowners still believe that it is a lifestyle only available to the super wealthy. This mentality is not just untrue, but it is also hurting an otherwise world-changing industry. What most homeowners don’t know is that there are hundreds of affordable ways to improve your home’s environmental impact. From simple lighting to reusable plastic products, every homeowner has access to green home solutions.

Solar Powered Candles

Installing solar panels that will power your entire home can be expensive and out of reach for many families, but that does not mean that you should avoid all solar powered devices. Hanging solar powered candles are a hot new trend. They can be seen hanging from porches across the country. These candles require such a small amount of solar power that it makes traditional non-solar porch lighting products seem primitive and wasteful. A hanging solar candle will usually cost no more than $30 to $40, but they require no electrical power and will last for many years to come.

Low-Flow Showerheads

Low flow showerheads not only save water, but they save energy as well. Using a low flow showerhead will provide you with the same quality showering experience while using only half the water of a traditional showerhead. This adds up over time, cutting out a huge percentage of your yearly water consumption. Now figure in the amount of energy that it takes to heat that water, and your savings will skyrocket. Water heating usually makes up for a large percentage of a home’s energy consumption, but it does not have to be that way. Low flow showerheads are inexpensive and pay for themselves in no time.

Eco-Friendly Cleaning Products

Cleaning products have been a major burden on the environment since their conception. However, there are plenty of innovative new companies developing natural products that work well and have little or no negative impact on the environment. Natural laundry detergents have advanced a lot since the idea first came about. New formulas are being developed every year, using all-natural ingredients that manage to clean as well as their chemical filled counterparts. The same goes for wood and counter cleaner sprays and stain removers. Some of these products may cost a little more than their dangerous competitors, but you will be doing the world a favor by making the switch.

Various Kitchen Items

There are tons of little items we use every day that often go unnoticed. From coffee filters to plastic wrap, everything that goes into the trash can will end up in a landfill. Luckily, most of these products can be reusable. Instead of using plastic wrap to store uneaten food, get a reusable container. Rather than throwing out a coffee filter every morning, there are durable filters designed to be reused for years after purchase. These are the little things that many homeowners forget about, but they add up over time. Pay attention to what you use on a daily basis and decide for yourself what you should change to have a green home.

Interior Design Tips to Help Sell Your Home

While it might be a seller’s market, an interior designer’s views on how you can make your home more appealing to buyers can be invaluable. Extra touches can make a world of difference to attract the eye of an interested buyer, according to Associate Designer Anne Liu from GEORGE Interior Design. Here are her tips on how you can give your house a fresh look without breaking the bank.

Space Plan

Liu says one of the most inexpensive ways to make your house look more appealing is to simply play around with your existing furniture and décor in order to figure out the optimal space plan; this will show off your house in the best light. 

“Sometimes it is just a matter of moving a sofa to an adjacent wall or re-arranging your wall art,” said Liu. “When in doubt, just remember that continuous lines and a simplified color scheme tend to make a space flow harmoniously and feel bigger. Getting rid of any clutter and unnecessary elements and allowing a buyer to really see the space is always a good idea in our book. Less is more!”

Paint

To capitalize on one of the most cost-effective ways to make your house look more refined, Liu suggests adding a fresh coat of paint.

The designer added, “Overall, stick with a lighter, neutral color to appeal to more buyers and then designate ‘feature’ walls that you can accent with a bit more color. Whenever possible, try to get rid of popcorn ceilings and repaint because the space will look cleaner and more modern.”

Add Trim/Crown Molding and Update Baseboards

Liu commented, “Updating the baseboards could give your space a much more tailored and current look without blowing the bank. If it is suitable to the architecture, adding crown molding could further enhance your space. Opt for clean, simple, and elegant trims for a timeless look.”

Flooring

Another way to instantly update a home is to replace old carpeting. Liu shared the following tip: “Gravitate towards carpeting material in a medium-neutral tone, woven with more than one color (or a fleck of color). This guarantees a good look that will also last. Also, updating a carpeted floor with hardwood flooring could be a big draw to buyers. It consistently adds warmth and character and may help your home have wider appeal.”

Kitchen

Liu noted that kitchens are undoubtedly a big focal point in a home. So what are your best options for making your kitchen the most appealing to a buyer? Liu posited, “The most critical things to most home buyers are stainless steel appliances and ‘granite’ or other non-porous solid surfaced countertop material. I use the term granite in quotations because most buyers want the properties of granite, but this actual stone material has fallen out of favor in recent years. Quartzite is the stone surface material being requested the most by clients and we're using a lot of Caesarstone, Silestone, and other brands of quartz as they install very nicely and the colors are very consistent.

Liu added, “Painting cabinetry could really clean up your kitchen but it comes at some expense. A complete kitchen remodel might fetch you a higher price for your home but undeniably a lot of time, energy, and money will have to be spent planning and executing the overhaul. If appliances, countertops, or a complete remodel are out of the question, then simply updating the cabinet hardware and sink fixtures could give the kitchen a fresher look.”

Bathroom

The designer says a beautiful bathroom can be a big draw. She added, “Like the kitchen, a fresh coat of paint on the cabinetry and/or a new countertop and new fixtures could freshen up the feel significantly. In powder rooms or smaller bathrooms, use ‘feature’ wallpaper or a more exciting paint color since the scale is not overwhelming.”

Fireplace and Chimney Maintenance

It’s getting closer to the time of year when there’s a fall chill in the air, and one of the nicest parts about cold weather is sitting by a blazing fire. Most likely, you haven’t used your fireplace since February. It’s unwise to just toss in some wood and a match without any proper maintenance beforehand, so what can you do now to ensure you’re ready for cozy fireside nights when the weather cools?

The average number of annual U.S. home fires caused by fireplace, chimney, and chimney connectors between 2003 and 2005 was 25,100, and the average costs for those fires was $126.1 million, based on the most recent statistics from the Chimney Safety Institute of America (CSIA). That’s roughly $5,024 in damage per home.

Annual chimney maintenance removes flammable creosote, the major cause of chimney fires, and identifies other performance problems. There are basically three levels of inspection. Read on to see which one is a fit for you and your fireplace.

1. Level One: This is a visual check with typically no roof climbing—or dancing to musical numbers a la Mary Poppins—involved. The inspector comes to your house with a flashlight, looks for damage, obstructions, creosote build-up, and soot, and tells you if you need a sweep. If so, he’ll grab his brushes, extension poles, and vacuum, and do it on the spot.

A level one typically runs about $125. Add a sweep, and you’re talking another $80, or about $205 for both services, according to CSIA.

2. Level Two: If you’ve experienced a dramatic weather event, like a tornado, hurricane or earthquake or if you’ve made a major change to your fireplace consider getting this level of inspection. This will include what you got with a level one, plus a visit to the roof, attic, and crawl space in search of disrepair. It concludes with a sweep, if necessary, and information on what repair is needed. The price will depend on the situation.

3. Level Three: This is typically only done after a chimney fire, because it’s practically a demolition. The chimney is torn down to be thoroughly inspected, and then rebuilt. Cost will vary.

In addition to an annual inspection, here are some tips for maintaining the health of your fireplace and chimney:

• Only burn dry, cured wood—logs that have been split, stacked, and dried for eight to 12 months. Cover your log pile on top, but leave the sides open for air flow. Hardwoods such as hickory, white oak, beech, sugar maple, and white ash burn the longest, though dry firewood is more important than the species. Less dense woods like spruce or white pine burn well if sufficiently dry, but you’ll need to add more wood to your fire more often, according to CSIA

• Only burn wood! Crates, lumber, construction scraps, painted wood, or other treated wood releases chemicals into your home, compromising your air quality. Log starters are fine for getting your fire going, but they burn very hot; generally only use one at a time.

• Remember to close your damper when you’re not using the fireplace, and to open it when you are!

• Have a chimney cap installed to prevent objects, rain, and snow from falling into your chimney and to reduce downdrafts. The caps have side vents so smoke escapes. A chimney sweep usually provides and can install a stainless steel cap, which is better than a galvanized metal one available at most home improvement retailers because it won’t rust,

• Replace a poorly sealing damper to prevent heat loss, or get a top-mounted damper that can also function as a rain cap.

• Install carbon monoxide detectors and smoke detectors in your house—near the fireplace as well as in bedrooms.

• Build your fire slowly, adding more wood as it heats and keeping your damper completely open to increase draw in the early stages. Burn the fire hot, at least occasionally—with the damper all the way open to help prevent smoke from lingering in the fireplace and creosote from developing.

• Get your chimney cleaned twice a year, if you burn more than 4 cords of wood annually.

Now, make some hot chocolate, gather a book or guitar, and enjoy the sweet crackle of a fire.

Tax tips for Homeowners

A huge benefit of homeownership is a variety of tax deductions that you should be aware of before you file your returns with the Internal Revenue Service. It’s important to consider each home tax deduction and credit you are entitled to, as well as avoid common tax-filing errors.

Property Tax

First, be sure to deduct the property tax expense on your return for the year you paid it. Keep in mind that it could be different than the year it was due.

Energy Upgrades

Another item to think about is whether you spent money on certain home energy-efficiency upgrades. If you did, there is a tax credit that will work in your favor (not to mention the savings you’ll enjoy on your utility bill after you’ve installed the energy upgrades).

Home Repairs

If home repairs were conducted, it’s worth noting that you can only claim deductions if part of your home is used for business or casualty losses. Be sure to discuss these types of deductions with a tax adviser so you don’t run afoul of IRS rules.

PMI

Also, if you purchased your home with a down payment of less than 20 percent and utilized Private Mortgage Insurance, then 2013 is the last year you will be able to claim the PMI deduction since Congress has allowed it to expire. Just keep in mind there are income limitations, so check with your tax advisor about whether you qualify for this deduction.

Capital Gains

Did you sell your home last year? If you made a profit, don’t forget that may you have to pay capital gains taxes on any profit. However, you can exclude $250,000 (or $500,000 if you’re a married couple) from your taxes.

MID

And of course there is the mortgage interest tax deduction. Make sure you don’t claim too much for this deduction. You are allowed to deduct home acquisition debt up to $1 million, as well as $100,000 in home equity debt.

Home Office

If your home is your primary place of business, then you could be eligible to deduct some of your home expenses, such as utilities and maintenance.

Casualty Losses

The country has suffered from a barrage of difficult weather conditions, so if disaster created property damage and destruction of your home, then you are able to deduct some losses (but be sure to carefully document your deductions with photos, receipts, and insurance claim reports). You should consult a tax adviser because filing for casualty losses can be complex, especially since your income and property value can impact the deduction, as well as depreciated values of items.

Fixing your home before selling......

Buyers tend to want listings that are in move-in condition. For that reason, sellers often put a lot of time and money into prepping their homes for market to realize the largest profit possible from the sale. But, is it worthwhile to fix a property up before selling if it is in a dismal state?

It's usually worthwhile to fix up a needy property in a good location that has great potential and that can be improved considerably with cosmetic improvements.

The reason why it makes sense to go through the effort is that most people don't have good imaginations and can't envision what a house might look like with work done to it. They simply relate to what they see.

For example, last year a grand old home sold in Oakland, Calif. Neighbors went directly to the sellers and asked if they could take a look at the house before it was fixed up for marketing. The sellers agreed and showed them the house. The buyers didn't like what they saw.

The house was subsequently improved by removing wall-to-wall carpet and refinishing the original hardwood floors that were underneath the carpet. The entire interior of the house was painted in beautiful decorator colors. Light fixtures were updated; the yard was spruced up; and the house was staged for sale. The transformation was stunning.

The property sold with multiple offers for considerably over the asking price. The buyers who had turned the property down before the house was fixed up were one of the four bidders; they weren't the ultimate buyers.

HOME SELLER TIP: 

There's a tip to be gleaned from this experience that's relevant to all sellers. Don't let a prospective buyer look at your home until it has been prepared for sale. Buyers remember what they see, not what you tell them the house will look like when you're done with the prep work. You could lose a good prospect by showing your home before it is ready.

Circumstances may not permit you to do much to a fixer property before you put it on the market. You might be short of funds or have a pressing deadline. In this case, the best approach can be to take advantage of the fact that the property you're selling is a fixer-upper. In other words, market it as a fixer.

Some sellers bridle at the notion of calling their home a fixer-upper. But, it can make good marketing sense. A certain segment of the market is looking for fixer properties that can be improved to increase value. In fact, these buyers sometimes overpay for the perceived potential.

Even though you might get lucky and sell a loser house for more money that you thought was possible, don't lose sight of the fact that you're marketing to a limited pool of buyers. Most buyers won't even look at a fixer because they don't have the time, expertise or resources to turn a property around. Listing a fixer at an enticing price is an important part of selling it for a good price. The list price should reflect concessions made for work that needs to be done.

To attract a fixer buyer, make sure you get broad marketing exposure. It's also a good idea to have pre-sale inspections done. Make the reports available to buyers to review before they make offers. This will help to minimize the chance of a deal falling apart when the buyer finds out the extent of the necessary work.

THE CLOSING: 

Even if you don't do fix-up work, the yard and house should be clean and free of debris so that the fixer buyers with vision will be able to see what the property has to offer.

Curb Appeal Matters (Even When You're Not Selling)

First impressions aren’t just important in the business world; they’re also crucial in the real estate world. Consequently, curb appeal is a detail that shouldn’t fall to the wayside, whether you’re currently selling your home or not. While it goes without saying that attention to curb appeal can make all the difference in getting a prospective buyer to part with thousands of dollars more when a sale occurs, there are plenty of reasons to boost your home’s curb appeal now (even if a “For Sale” sign isn’t posted on your front lawn).  

If you really pay attention to the way your home looks from the street, your mind won’t necessarily be drawn immediately to home sales. After all, pride in your home’s appearance maintains the value of your investment and curb appeal also attracts good neighbors. If another home is for sale on your street, strong curb appeal keeps a neighborhood’s values intact. New neighbors also will be committed to home upkeep if other homes set a positive example.  

Here are a few tips to improve your home’s curb appeal: 

Clean up

If you have kids, a messy array of toys sprawled across your front lawn isn’t the most appealing look. Keep your front lawn as tidy as possible and your garage clean enough so that you can park your vehicle inside, as both actions add to your home’s curb appeal. And if you have any lingering weeds or dead plants, then it doesn’t take much time to remove them.

Personalization

No one wants to buy a home that looks like all other homes and therefore you probably don’t want to live in a home that doesn’t reflect your tastes and uniqueness. Curb appeal also can be a means of self-expression, such as whether you love brilliant colors or prefer a more subdued palate. A strong landscape design can really make your home stand out from the crowd.

 

Doors and Windows

If your doors and windows are showing significant wear-and-tear, then you may want to consider upgrading or cleaning them because they are some of the first items that people notice. Chipped paint on the front door or dirty windows detract from your home’s look and can be easily fixed with a fresh coat of paint or window washing.

Porch

People may be more likely to camp out in front of a television rather than on a front porch, but a porch significantly adds not only to the selling value of a home but its curb appeal as well. If your home has a porch, ensure that it is free of dirt and that there is inviting outdoor furniture—all of which makes for a home that looks welcoming.

Outdoor Lighting

From a visual standpoint, portable outdoor lamps, solar garden lights, or other means of outdoor lighting can really bring out your home’s exterior features and keep your home looking sharp during the evening hours.

It’s clear that whatever you do, curb appeal is an important part of your home and it comes down to planning and execution. 

MISSION MAINSTREET GRANTS

5 Kitchen and Bath Remodeling Trends That Will Last

To help you get ahead of and sort out the kitchen and bathroom trends — pity the last fool to install an avocado appliance in the 1970s — HouseLogic.com went to this month's trend central, the International Builder's Show. Our takeaway: For gosh sake, enjoy your home; remodel so that you love where you live.

Still, with a couple of exceptions, these five kitchen and bath trends offer lasting value:

1. Kitchen cleanliness.

By clean, we're talking design, not germs. Kitchens are going clean, contemporary, and horizontal (open shelves, long and horizontal pulls, thick countertops). Even in a classic kitchen, go with simple, flat cabinets rather than highly carved cabinet details, says designer MaryJo Camp of Design Camp, Denver, N.C.  

Tip: This is a trend to get on board with. A simple, tidy, fresh appearance will have broad appeal if you decide to sell.

2. Color is out.

This year, colors are cycling out, Camp says, except for black and white used together. 

Tip: Practically speaking, black and white are hard to keep looking good. Black kitchens show every scratch and white cabinets show every speck of dirt.

Regardless, color is fickle; choose what's best for your space.

 

3. Dark wood is where it's at.

If you've had white cabinets, you know they show every speck of dirt, which can drive you crazy unless you have a cleaning fetish. Combine those white cabinets with another up-and-coming trend: dark wood. Or if your budget can handle the hit, go with specialty woods like mahogany or zebra wood that can make an island look like a piece of furniture.

Tip: Alternatively, you could invest your money in more kitchen storage and functionality than trendy decorative elements that might not stand the test of time.

4. Appliances that blend in.

The more open our kitchens get, the more we want them to look like the rest of the house. That's fueling a trend away from the big pro range and ginormous stainless-steel refrigerator and toward concealed, high-performance refrigerators and dishwashers. Induction cooktops, which use less electricity than electric cooktops, are growing in popularity, Camp said.

Tip: When you buy appliances, look for the Energy Star label or go even deeper on energy performance ratings with Consortium of Energy Efficiency. 

5. Ageless design gets easy.

What the Baby Boom wants, the Baby Boom gets. And Baby Boomers want to live in their homes forever. That's led manufacturers to create DIY remodeling products with built-in universal design features — like toilet paper roll holders strong enough to hold your weight as you arise from the throne.

If you wanted a no-threshold shower five years ago, you had to have it fabricated as a custom piece, said Mary Jo Peterson, a Brookfield, Conn., designer. Today, companies sell no-threshold shower kits with trench-style drains covered with grills so you can roll yourself right in.