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J.K. Lasser's 1001 Deductions and Tax Breaks 2013: Your Complete Guide to Everything Deductible by Barbara Weltman

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CHAPTER 11

Real Estate

Alert
At the time this book was printed, Congress had not extended numerous breaks for 2012 that had expired at the end of 2011. Check the online supplement in February 2013 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2012 returns.

Despitethe atrocious housing market over the past several years, the vast majority of Americans own real estate, with about 65.5% owning their own homes. (Tax write-offs for your main home are discussed in Chapter 4.) But owning a principal residence isn't the only way to invest in real estate. Many individuals also own second homes or invest in rental properties to generate income.

This chapter explains:

  • Vacation home
  • Home office
  • Rentals
  • Low-income housing credit
  • Rehabilitation credit
  • Deduction for energy-efficient commercial buildings
  • Special breaks for certain disaster victims

For more information, see IRS Publication 527, Residential Rental Property (Including Rental of Vacation Homes); IRS Publication 587, Business Use of Your Home (Including Use by Day-Care Providers); and IRS Publication 946, How to Depreciate Property.

Vacation Home

The rich have traditionally maintained more than 1 residence, summering in Newport, skiing in Aspen, escaping winters in Miami. But today, second homes aren't limited to the very rich; they are increasingly common among an ever-broadening populace. The tax law offers some tax breaks that help to make ownership of vacation homes more affordable.

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