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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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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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Qualified Charitable Contributions

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Qualified Charitable Contribution If you're at an age where you need to be taking Required Minimum Distributions (age 70.5) from your IRA, a qualified charitable contribution and some planning may allow you to lower your overall tax liability. Let's say that a couple's 2019 itemized deductions include $8,000 in property taxes, $4,400 in interest and $20,000 in charitable contributions.   That would total $32,400 which exceeds the 2019 $25,300 standard deduction for married couples, 65 years of age or older, filing jointly.   Their required minimum distribution from their IRA is $40,000 which will be taxed at ordinary income.   If this couple is in the 24% tax bracket, the tax liability would be $9,600. Alternatively, if they made the $20,000 in charitable contributions from their IRA as a Qualified Charitable Contribution, it would not be taxable in the withdrawal.   The balance of the RMD of $20,000 would be taxable at 24% which would have a tax lia...
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