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Las Vegas Real Estate
Blog by Mary Warren
Las Vegas, Nevada
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Las Vegas Real Estate
Jun. 24, 2007
Categorized in: About Las Vegas & Real Estate
The Real Property Transfer Tax is a tax collected when a home is sold in the state of Nevada. The County Recorder collects it at the time of recording and is part of the seller's closing costs. In Clark County NV (Las Vegas, Henderson, etc) the rate is $5.10 per $1000 of value. This is approximately 1/2 % of the sale price of a home. If a typical home sells for $250,000 the transfer tax would then be $1300. This cost is typically a seller cost but can be negotiated.The basis for the tax is the actual selling price or the estimated market value of the property.Who is Affected: All parties who participate in transactions involving the transfer of real property. All of Nevada pays this tax...it varies as to the amount from county to county.
Nov. 10, 2006
Categorized in: Mortgages
Current Law: In order to take mortgage interest deductions (MID), taxpayers must comply with the following
rules, where applicable.
1. Debt on a principal residence and a second home, combined, may not exceed $1 million. (If mortgage debt exceeds $1 million, interest on the increment above $1 million is not deductible.)
2. Debt on home equity loans (or lines of credit) may not exceed $100,000.
3. All debt (mortgage debt and home equity debt) must be secured by the principal residence or the second home for which the deduction is claimed.
4. Only debt used to acquire, construct or substantially improve a residence qualifies for a deduction. (This debt
is referred to as acquisition indebtedness.) 5. MID on refinancings is allowed only to the extent that the amount of debt on the refinancing does not exceed the amount of outstanding debt that is refinanced.
6. Points (or prepaid interest) on refinanced debt is not deductible but must be amortized over the term of the loan.
7. Interest on acquisition debt is deductible for purposes of computing both the regular income tax and the alternative minimum tax (AMT). Interest on home equity debt, however, is not deductible in computing the AMT.
Take a look at number 5 above. Do you know anyone who refinanced their home in the last few years...not for improvements, but just to pull out cash at favorable interest rates, taking advantage of the appreciation in the market? If you know anyone
who falls into this situation, and there are many who do, are they taking a mortgage interest deduction in an amount that they are not entitled to take? Interest deductions on loan amounts exceeding the acquisition loan payoff plus $100,000 are not allowable.
Example: Buy a house for $200,000 and finance $150,000. Loan paid down to 125,000. Appreciation and low interest rates allows owner of this property torefinance and new loan amount is $350,000.
Interest on what amount of the $350,000 loan is tax deductible?
Answer: $225,000 I know that there are many who are taking interest deductions they are not entitled to take.
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