The Gift of Home Tax-free!

December is not only when we give gifts to our loved-ones for the holidays but it's also the time to review tax-saving options for 2019 and plan for 2020 and what could be a better gift than tax-free help with a down-payment for a new home?

Parents, grandparents, aunts and uncles, and even friends can start to pass along/gifting their estates while reducing inheritance taxes and getting to see their family enjoy the benefits of their gift

Under current IRS guidelines (please consult your accountant for tax advice and ramifications) each

parent or relative can give up to $15,000 to each child or relative every year. That would mean that a mother and father can each give $15,000 a year to each son, daughter, and/or grandchild that would amount to $30,000 a year in total per couple for each person that you gift.

If both sets of parents want to help with the down-payment on a house; each of the parents can give each borrower a gift of $15,000 per year. That would add up to $60,000 for both of you! That is a significant amount of tax-free money to help you buy a home for your family! Of course, a gift can also be less than $15,000, so give what you can.

That amount is per calendar year and not based on every twelve months. That would mean that they could give $60,000 (or more) in December 2019 and an additional $60,000 (or more) in January

2020. With less than one-month left , this is the time to bring up the subject with your family. What could make them happier than helping you buy a house and saving money on taxes?

For most types of mortgage loans, you will need to have 5% of the amount of the down-payment on your own, however, there are exceptions. To find out the exceptions and details about how gift money can be applied to your down-payment contact a reputable mortgage broker.

More about tax-free gifts and life-time limits: https://smartasset.com/retirement/gift-tax-limits

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About the author: Marilyn Messenger, a licensed real estate broker, Certified Residential Specialist, and Accredited Buyer Representative, and Certified Luxury Homes Marketing Specialist is associated with Andrew Mitchell and Company in Concord has been representing home buyers and sellers in Wayland, Sudbury, Maynard, Stow, and Concord MA since 1993. www.MarilynMessenger.com for more. Visit www.marilynmessenger.com to see homes for sale, get the latest real estate market reports, and learn about having your own buyer agent on your side.

Down-Payment Gifts Save Taxes!

What could be a better gift than tax-free help with a down-payment on a home?

Parents, grandparents, aunts and uncles, and even friends can start to pass along/gifting their estates while reducing inheritance taxes and getting to see their family enjoy the benefits of their gift

Under current IRS guidelines (please consult your accountant for tax advice and ramifications) each parent or relative can give up to $15,000 to each child or relative every year. That would mean that a mother and father can each give $15,000 a year to each son, daughter, and/or grandchild that would amount to $30,000 a year in total per couple for each person that you gift. 

If both sets of parents want to help with the down-payment on a house; each of the parents can give each borrower a gift of $15,000 per year. That would add up to $60,000 for both of you! That is a significant amount of tax-free money to help you buy a home for your family! Of course, a gift can also be less than $15,000, so give what you can.

That amount is per calendar year and not based on every twelve months. That would mean that they could give $60,000 (or more) in December 2019 and an additional $60,000 (or more) in January

2020. With less than one-month left , this is the time to bring up the subject with your family. What could make them happier than helping you buy a house and saving money on taxes?

For most types of mortgage loans, you will need to have 5% of the amount of the down-payment on your own, however, there are exceptions. To find out the exceptions and details about how gift money can be applied to your down-payment contact a reputable mortgage broker. 

More about tax-free gifts and life-time limits: https://smartasset.com/retirement/gift-tax-limits  

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About the author: Marilyn Messenger, a licensed real estate broker, Certified Residential Specialist, and Accredited Buyer Representative, and Certified Luxury Homes Marketing Specialist is  associated with Andrew Mitchell and Company in Concord has been representing home buyers and sellers in Wayland, Sudbury, Maynard, Stow, and Concord MA since 1993. www.MarilynMessenger.com for more. Visit www.marilynmessenger.com to see homes for sale, get the latest real estate market reports, and learn about having your own buyer agent on your side. 

The Gift of Home Saves Taxes!

Holiday time is when people get together with family and friends, to exchange gifts and talk about plans for future which often include buying or selling a house. It’s also year-end and a good time to think about estate planning and taxes. Did you know that parents, grandparents, aunts and uncles, and even friends can start to pass along/gifting their estates while reducing inheritance taxes and getting to see their family enjoy the benefits of their gifts? What could be a better gift than tax-free help with a down-payment on a home?

NOTE: The following information was provided by a loan officer, however you should always talk

with a tax expert and financial adviser about your specific goals and financial situation.

Gifts are involved in approximately 25% of all of the mortgage loans that are transacted. Gifts from family members and relatives are allowed under IRS and lending guidelines but lenders do not report the parties involved to the IRS.

Under current IRS guidelines (please consult your accountant for tax advice and ramifications) each parent or relative can give up to $14,000 to each child or relative every year. That would mean that a mother and father can each give $14,000 a year to each son, daughter, and/or grandchild that would amount to $28,000 a year in total. If both sets of parents want to help with the down-payment on a house; each of the parents can give each borrower a gift of $14,000 per year. That would add up to $56,000 for both of you! That is a significant amount of tax-free money to help you buy a home for your family! Of course, a gift can also be less than $14,000, so give what you can.

That amount is per calendar year and not based on every twelve months. That would mean that they could give $56,000 (or more) in December 2017 and an additional $56,000 (or more) in January 2018. With only on month left in 2017, this is the time to bring up the subject with your family. What could make them happier than helping you buy a house and saving money on taxes?

For most types of mortgage loans, you will need to have 5% of the amount of the down-payment on your own, however, there are exceptions. To find out the exceptions and details about how gift money can be applied to your down-payment contact a reputable mortgage broker.

Visit www.marilynmessenger.com to see homes for sale, get the latest real estate market reports, and learn about having your own buyer agent on your side. 
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About the author: Marilyn Messenger, a licensed real estate broker, Certified Residential Specialist, and Accredited Buyer Representative associated with Andrew Mitchell and Company in Concord has been representing home buyers and sellers in Wayland, Sudbury, Maynard, Stow, and Concord MA since 1993. www.MarilynMessenger.com for more. 

Record Improvements Now

There is a significant difference in how the money you spend on your home is treated for income tax purposes.  Repairs to maintain your home’s condition are not deductible unlike rental property owners who can deduct repairs as an operating expense.

On the other hand, capital improvements to a home will increase the basis and affect the gain when you sell which may save taxes.
Additions to a home or other improvements that have a useful life of more than one year may be considered an increase to basis or cost of the home.  Other increases to basis may include special assessments for local improvements like sidewalks or streets and amounts spent after a casualty loss to restore damage that was not covered by insurance.

Unlike repairs, improvements add to the value of a home, prolong its useful life or adapt it to new uses.

You can read more about improvements and see examples beginning on the bottom of page 8 of IRS Publication 523.  For a form to keep track of money you spend, print this Improvement Register.

Looking for the Largest Deduction

IRS allows taxpayers the option to take the standard deduction or the itemized deduction.  The astute taxpayer will compare to see which one will result in the greatest deduction and the election can be made each year.

The 2013 standard deduction for a married couple filing jointly is $12,200 and $6,100 for a single taxpayer.  It doesn’t require any proof of actual expense and has no requirement for home ownership.

Items that can be included on Schedule A for itemized deductions include:

• Certain taxes paid for state and local income tax, general sales tax, real estate property taxes, personal property taxes or other taxes paid
• Qualified home mortgage interest, investment interest or possibly, mortgage insurance premiums
• Charitable contributions
• Casualty or theft losses
• Medical and dental expenses that exceed 7.5% of adjusted gross income if born before 1/2/49 or 10% if born after 1/2/49
• Job expenses and other miscellaneous deductions that exceed 2% of adjusted gross income

A non-homeowner taxpayer who has been taking the standard deduction needs to consider that it isn’t just the ability to deduct the mortgage interest and property taxes.

While the standard deduction might be the obvious choice for a non-homeowner, the combination of the mortgage interest and the property taxes plus other allowable deductions not recognized previously such as charitable contributions, now makes taking the itemized deductions significantly more advantageous.

Of course, this is only general information and should not be considered advice. The best way to make any tax decisions is to talk with your tax professional. If you would like a recommendation for a CPA, please let me know. I would be happy to refer you.

Personal Finance Review

You’ll need to earn $2.00 for every $1.00 you want to spend assuming you pay 50% of your earnings on income tax, social security and Medicare. On the other hand, you get to keep 100% of every dollar you save on your personal expenses because the taxes have already been paid.

January/February are when you start to sort out income and expenses to prepare your tax returns. While you're preparing for tax time also take the time to review your expenditures with the diligence of an exuberant IRS agent on commission.  It’s an exercise that most people don’t feel they have time to do but the rewards make it entirely worthwhile.

• Get comparative quotes on insurance – car, home, other 
• Review and compare utility providers 
• Review plans on cell phones 
• Review plans on cable TV, satellite for unused channels and packages or receivers 
• Review available discounts on property taxes 
• Consider refinancing home – lower rate, shorter term or cash out to payoff higher rate loans 
• Consider refinancing cars 
• Call credit card companies to ask for a lower rate 
• Review all of the automatic charges on your credit cards – consider no-fee cards 
• Search for late fees that are regularly being paid and eliminate them. 
• Review all bank charges for accounts and debit cards; determine if they can be reduced or eliminated.

If you don’t want to review your credit card accounts, consider reporting the cards stolen so that new numbers will be issued.  You can notify the companies that need your number.  Companies who might have your number won’t be able to automatically renew services that you may no longer be using.  You can be assured that they’ll contact you when the old number doesn’t go through and you can re-evaluate the decision at that time.

What Can You Expect?

The two most frequently quoted constants in life are death and taxes. Two more things would-be homeowners can expect in the near future are increases in mortgage rates and housing prices.

Interest rates have been kept artificially low for several years by the Federal Reserve in an effort to strengthen the economy. Policy is shifting to allow them to seek their own natural level and that will surely result in higher mortgage rates. Rates on 30 year fixed mortgages are up over 1% from January, 2013.

Foreclosure activity is down, new home starts are up and prices have been increasing in most markets for two years. Most experts agree that the cost of housing is going up.

If the price were to go up by 2% and the mortgage rate by 1% while a buyer is “sitting on the fence” making a decision, the payment would go up by almost $175.00 each and every month for the term of the mortgage. Even if a person can afford to make the higher payments, what could they have done with that extra $175.00 a month? Buy furniture? Car payment? Principal reduction?  Retirement contribution? Save for a rainy day?

Click here to determine what the cost of waiting to buy will be using your price home.
















Inventory is extremely low in most towns; only 44 single-family homes for sale in Sudbury, 17 in Wayland; and 15 in Maynard. I will be posting and emailing market updates in the next day or two.

Low inventory makes this a very good time to put your house on the market before the spring becomes more competitive as more people decide to sell. And you will have the edge on other buyers who still need to sell in order to move forward.

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Sales Tax Holiday Weekend; So What's a Tax Stamp?

Everyone knows this weekend is the Massachusetts sales tax holiday! Who doesn’t love a tax

holiday? We hear a lot of news about federal income tax, state income tax, property taxes, capital gains tax, tax loop-holes, proposals for new taxes on everything from gasoline to computer services…taxes are always being talked about.

The tax we never hear about is called a “tax stamp”. A what? It’s the tax the state of Massachusetts collects when you sell a house. When I talk with people who are planning to sell their home about what their selling expenses will be, they are almost always surprised (and not in a good way) to hear they have to pay the state when they sell.

How much is it? $4.56 per thousand and unlike federal gain taxes that are only on the “gain” and there are standard exemptions (check with you accountant), tax stamps are paid on the total sale price whether you have a gain or not.

Example: You sell your house $550,000. The tax would be 550 x $4.56 = $3,058.00. This is the amount that will show up on the as a deduction on the sellers side of HUD settlement statement and paid at closing (before you get the proceeds.)

So that's what a "tax stamp" is! Enjoy the sales tax holiday even if you're planning to sell!
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Marilyn Messenger has been selling residential real estate  in the Wayland/Sudbury area for 20 years. Visit www.MarilynMessenger.com or call 508-596-3501 for answers to your home selling and/or buying. questions.

"Fiscal Cliff" Real Estate Extenders

"Fiscal Cliff" legislation passed. Here are some of the details that effect real estate (from the National Association of Realtors website). Good news for most homeowners, especially people who are in need of a short sale or are going to end up in foreclosure, and people who are planning to buy a home.

Real Estate Tax Extenders:

• Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014
• Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012
• 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012
• 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.

Click here to see more details and please contact me if you have questions about home buying or selling.

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5,365 Reasons to Stay on the Market During the Holidays!

Having your house on the market during the holidays can be inconvenient and a lot of sellers assume that nothing will happen anyway.

Did you know that last year 65 single-family, condominiums, and multi-family homes in Wayland, Sudbury, Maynard, and Stow went under agreement between November 20, 2009 and January 05, 2010? There were 16 in Wayland, 25 in Sudbury, 11 in Maynard, and 13 in Stow! Statewide in Massachusetts, the total was 5,365! Here are some of the reasons why:


Less competition – a lot of people will take their homes off the market, so buyers will have fewer choices; make your home one of the choices.

Serious buyers – while there may be fewer buyers, the ones who are looking tend to be more serious. Everyone likes to look at houses in the Spring; it’s almost like entertainment for some. At this time of year people are busy and the daylight hours are shorter. People who are taking the time to look are serious.

Taxes - Many buyers want to close by year-end for tax purposes and it is still possible; they are ready to move, so you can get it done quickly and move on.

Things to celebrate – people get engaged over the holidays, get bonuses, etc. so they have good reasons to buy.

Job Relocation – this is when a lot of people who are coming to the area to start jobs in the new year come to buy – Massachusetts unemployment is down and companies are hiring again. If they have school children they can make their move during the school vacation get settled for second semester rather than starting in the middle.

Family and friends. People who are thinking about moving back to the area come “home” to visit family and friends and go out to look at houses while they’re here.

Sellers become buyers. If you’re buying another home, you can take advantage of opportunities to purchase from another serious seller, year-end tax breaks etc.

Momentum. Taking your home off the market breaks the marketing momentum. Someone who likes your house online may be waiting until they get their bonus, or job confirmation, holiday gift. If your house disappears from the market, they will buy something else.

Houses do sell over the holidays - 65 in just four towns last year!If your house is priced properly and you keep it on the market, yours may be one of them. Happy Holidays!

Date source: MLSPIN (Multiple Listing Service Property Information Network)

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