IRS touts real estate tax breaks

BY SHANNON BUGGS / Houston Chronicle

Published: January 3, 2009

Home is where the tax relief is. The Internal Revenue Service and the U.S. Department of Energy are touting the following real estate-related tax breaks Congress recently created or extended for individual taxpayers:

→Mortgage Forgiveness Debt Relief Act of 2007.

For taxpayers who lose their homes in foreclosure.

What: Allows homeowners to exclude from income any debt forgiven in a home foreclosure.

→First-time home-buyers' credit.

For first-time home buyers who purchase homes between April 9, 2008, and June 30, 2009.

What: The credit is 10 percent of the purchase price up to $7,500 for either single taxpayers or married couples filing jointly. The tax credit must be paid back in equal payments over 15 years. The IRS defines first-time home buyers as people who have not owned a home in the three years prior to a home purchase.

→Property tax deduction.

For taxpayers who pay real estate taxes but do not qualify to itemize other tax deductions.

What: Increase your standard deduction by as much as $500, or $1,000 if you are married and filing jointly, without having to itemize.

→Energy-saving home improvement credit.

For homeowners who purchase and install energy-efficient windows, insulation, doors, roofs and heating and cooling systems.

What: Save your receipts to file for a tax credit for the amount you spent on the improvements up to $500. However, to qualify, the improvements can't be "placed in service" before Jan. 1, 2009 or after Dec. 31, 2009.

→Residential renewable energy credit:

For homeowners who install solar electric systems, small wind systems or geothermal heat pumps.

What: A 30-percent credit for solar electric systems placed in service between Jan. 1, 2006, and Dec. 31, 2016.