Cathy Glass, Realtor® Today's Real Estate Agent » Cathy Glass, Realtor® Today's Real Estate Agent

Choosing Your Deduction

CathyGlass — Wed, 18 Jan 2012 12:24:56 +0000

Choose Your Deduction

One third of all U.S. households, 75% of households with more than $75,000 income and most homeowners itemize their deduction on their federal income tax returns. It makes sense because the interest paid on their mortgage and their property taxes probably exceeds the allowable standard deduction.

However, with interest rates as low as they have been in the last two years and the price of homes having come down considerably, it is possible that the standard deduction may be the better choice.

Each year, the taxpayer can compare the total of the itemized deductions to the standard deduction to select which method will result in the most benefits. The 2011 standard deduction is $11,600 for married couple filing jointly and $5,800 for single filers.

For Oak Ridge and Knoxville Homes for sale ask Cathy Glass, Realtor® or visit BuyandSellKnoxvilleHomes.com or BuyandSellOakRidgeHomes.com

Tim Cook’s modest home

CathyGlass — Thu, 12 Jan 2012 01:19:45 +0000

Tim Cook’s modest home – http://pulse.me/s/4SMMc

High-yield mortgage REITs: Too good to be true?

CathyGlass — Thu, 12 Jan 2012 01:14:41 +0000

High-yield mortgage REITs: Too good to be true? – http://pulse.me/s/4T1XL

Ever so humble: Homes of the GOP contenders

CathyGlass — Thu, 12 Jan 2012 01:13:35 +0000

Ever so humble: Homes of the GOP contenders – http://pulse.me/s/4Rg9e

Financial Reasons for Homeownership

CathyGlass — Wed, 11 Jan 2012 15:07:50 +0000

Part of the American Dream is to own a home. A home is a place to call your own; a place to raise your family and share with your friends. A home is a place to feel safe and secure. A home is a good investment?

In a recent report* by Beracha and Johnson, it is suggested that buying a home is the right thing to do but not necessarily for the reason that people expect. A home is, in many instances, the largest investment that homeowners have and it accounts for the majority of their net worth.

The report suggests that the self-imposed savings due to amortization has a significant contribution to a person’s net worth. The premise was determined by comparing the net worth of buyers to renters over a 31 year period of time.

When the savings in rent and down payment were reinvested, renters had a greater net worth than buyers after each 8-year cycle by a margin of 91% to 9%. On the other hand, when the requirement to reinvest the savings was dropped and renters were allowed to spend the savings on consumption, the Buyers had a greater net worth 84% compared to 16% for renters.

Appreciation, tax savings and amortization contribute to lowering the cost of housing and help homeowners build equity. The forced savings due to amortization benefits the individuals who may not be disciplined enough to invest the savings otherwise. Regardless of which benefits apply in different situations, owning a home can be a satisfying investment both emotionally and financially.

*Factor Sensitivities in the Making of Buy vs. Rent Decisions: Do Homeowners Make the Right Decision for the Wrong Reason by Eli Berach and Ken J. Johnson of Florida International University writing for the Journal of Housing Research.

For more information and help with your particular situation call Cathy Glass, Realtor, Today’s Real Estate Professional in the Knoxville, Tennessee area