An unbiased guide to buying your first home

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Answer

A: Tax benefits will vary widely depending on the circumstances of the home buyer. The main tax benefits are the ability to deduct property taxes and mortgage interest from your income thus reducing your federal income tax bill (state laws very widely in terms of tax benefits for state income taxes). However, if even with the additional deductions you are still better off taking the standard deduction rather than using itemized deductions you will have no income tax benefits.

Should you own a home and be fortunate enough to have it appreciate in value, tax benefits will also exist on the re-sale profit. First, if you buy another home you may be able to defer the gain under certain circumstances. You may also be able to avoid tax on all the gain if you are above a certain age when you finally sell and do not reinvest and the gain is $500,00 or less

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