Home Mortgage Interest Deduction

• Identify the two main requirements for mortgage interest deductions.
• Discuss the limits on home equity loans when determining tax deductions.
• Summarize the differences between acquisition debt and home equity debt.
• List the three requirements needed for deductible interest on a qualified residence.
• Summarize the general requirements that must be met for home mortgage points to be deductible.

Taxation of Profit-How Gains or Losses are computed

• Explain the gain or loss formula.
• Identify items which may be included in the selling price.
• List items which may (or may not) be used as selling expenses.
• Explain adjusted basis and why correct determination is valued in determining gain (or loss).
• Summarize the differences between repairs versus capital improvements and how each differs for rental properties versus personal residences.

Exclusion Rule for Gain on Sale of Principal Residence

• Define principal residence.
• Explain when the gain realized on the sale or exchange of a principal residence is free.
• Identify the tax planning ideas that have been replaced (i.e., 24-month rollover and over-55 one-time exclusion).
• Summarize the §121 requirements to exclude up to $250,000/$500,000 MFJ from gross income.
• Explain what happens when one spouse qualifies and the other does not.

Applying the Passive Loss Rules To Real Estate Professionals

• Explain RREAs (rental real estate activities).
• Summarize requirements for material participation in rental activities.
• Discuss the three common tests to define material participation for real estate investors.
• Summarize the general requirements that must be met for home mortgage points to be deductible.

Office-in-Home Rules

• Summarize the three criteria to establish an office-in-home deduction.
• Define principal place business.
• Discuss which transportation costs may be converted to business mileage.
• Cite examples of direct and indirect expenses that are used to calculate the office-in-home deduction.
• Calculate the office-in-home deduction.
• Discuss how the office-in-home deduction creates a taxable gain when the home is sold.