Real Estate Tax Issues for 2011
Recent congressional actions have affected many real estate issues. Consult your tax advisor if you think any of these general provisions might apply to you and for special requirements rules and effective dates.
- The ability to deduct state and local sales tax instead of state and local income tax has been extended through 2011.
- The 2010 income tax rates will be retained though 2012, with a top rate of 35% on ordinary income. The current capital gains and dividend rates have also been extended for the next two years; 0% for anyone under the 25% tax bracket, 15% for those above the 25% tax rate.
- For those of you with children, the child tax credit, dependent care credit, earned income credit and the adoption tax credit have all been extended, as have education incentives such as the student loan interest deduction and the tax credit for qualified tuition and fees.
- The estate tax is back with a $5 million per person exemption. Unused exemptions of a deceased spouse will transfer over to the surviving spouse. Estates over $5 million will have a top rate of 35% for estate, gift, and generation skipping transfer taxes trough 2012. For estates of decedents who died in 2010, they may choose to apply the new rules or have no estate tax and use the modified basis rules of 2010.
- Individuals can still make tax free distributions to charity up to $100,000 per taxpayer directly from their IRA’s.
- Bonus depreciation has been enhanced: 100% for qualified purchases after 9/8/2010 and before 1/1/2012, 50% after 12/31/2011 and before 1/1/2013. It may make more sense to use the deduction in future years when we expect taxes to be higher.
Also, don’t forget that the county deadline for agriculture and homestead exemptions is April 30, 2011. You can pick up applications at the Appraisal office located in the basement of the courthouse. If you have just purchased a home your appraisal will arrive in the mail and make sure the stated value is correct. If you have questions call our office, 830-997-9591.
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