YOUR MONEY
CREDIT, COLLEGE, TAXES AND REAL ESTATE
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Here's a twist: The IRS lets some taxpayers deduct expenses they didn't even pay.
This helps you if you bought a home during 2007 and persuaded the seller to pay points charged on your mortgage loan. Until a few years ago, when the seller paid the points, nobody got a deduction. But now, the IRS says buyers usually can pretend they paid the points themselves, and that translates into a valuable write-off.
Because a point is 1% of the mortgage amount, this could save you lot of money. For example, $2,500 of seller-paid points will save you $625 if you're in the 25% income-tax bracket. You'll probably get a break on your state tax return, too.
Also, check to see if the seller paid mortgage interest or property taxes for part of the year that you actually owned the house. If so, you get to deduct those costs on your return -- even if you didn't reimburse the seller.
personaFor more information about deductions for homeowners, see our Taxopedia.
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