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Why Keep Track of Home Improvements

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Homeowners receive a generous exclusion on the gain of their principal residence up to $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly.   Most people probably consider the gain or profit in a home to be the difference between the purchase price and the sales price. IRS allows a taxpayer to lower the sales price by the selling expenses before calculating gain.   Normal expenses like real estate commission, title policy, attorney fees, and other sales expenses may be included if they are normal and customary. Another significant adjustment is that capital improvements made during the holding period can be added to the cost basis.   Normal maintenance like repairs are not considered improvements.   IRS says that if the expenditure materially adds value (features) to the property, or appreciably prolongs the useful life of the property, or adapts a portion of the property to a new use, it can be considered a capital improvement. Exam...
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When will the market turn?

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Housing affordability has declined dramatically in 2022 due to continued rising home prices and a three-percentage point jump in mortgage rates.   Based on the popularity of Google searches for "housing bust" or "housing bubble", it could be surmised that buyers are anticipating relief, but they are probably not going to see it anytime soon. Home price appreciation is moderating and is down from the 20% level experienced in 2021.   Some of the major industry prognosticators are estimating anywhere from 9% to 14% for 2022.   Interest rates are expected to continue to rise through the end of 2022 and could be at 7%.   Freddie Mac 30-year fixed-rate mortgage was 6.66% on October 6, 2022. Even though homes currently for sale increased to 3.2 months in August 2022, it isn't that much more than it was for the same month in 2021 when it was at 2.6 months.   Most markets are still entrenched in favor of sellers because a balanced market ...
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Grilling Safety

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More people grill in July, June & August than any other months and correspondingly, there are more injuries, as well as fires, due to grilling accidents in those months. Even though Labor Day is in September, we still need to be aware of safety. Close to 20,000 patients per year visit the emergency room due to injuries involving grills.   Approximately half of the injuries involving grills are thermal burns.   If you are around fire, there's a chance of getting burned.   About 2/3 of American households own at least one outdoor barbecue, grill or smoker.   Interestingly, gas grills contribute to more fires than charcoal grills.   In addition, there are over 10,600 home fires started by grills each year. While grilling is associated with celebrations, good food, fun and friends, it is important to make sure that accidents don't interrupt your activities.   Only use BBQ grills outdoors and in ventilated areas Place the grill away from ...
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