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Success L aw BEFORE YEAR’S END If you’ve been thinking about buying or selling real estate, your attorney can help you evaluate how the timing of the deal — and the current tax code — can affect your bottom line. TEXT BY JACQUELINE M. LAGE, ESQ. MORTGAGE DEDUCTIONS Current tax laws allow buyers who purchase a primary home before Dec. 31 to deduct interest paid on the mortgage, property taxes paid and certain other charges paid in connection with obtaining the loan. It’s always important to understand the mortgage repayment terms including the interest charged, pre-payment penalties and what escrows are required. SELLER SAVINGS The sale of real estate is typically subject to capital gains taxes, but the IRS Code allows sellers who’ve lived in a home for at least 2 of the last 5 years to take advantage of a substantial exemption. Current tax laws grant individuals an exemption of up to $250,000, and married couples up to $500,000 from capital gains taxes on the proceeds from a home sale. GIFT TAX The gift tax exclusion is a way to transfer wealth during a person’s lifetime. In 2016, the gift tax exclusion is $14,000 per recipient or $28,000 per recipient receiving a gift from a married couple. This can be advantageous for individuals who wish to avoid substantial estate tax implications when they pass. Currently, the estate tax is 40% for estates over $5,450,000. ABOUT THE AUTHOR CAPITALIZE INCENTIVES With interest rates at record lows, buyers are looking to lock in rates that will help curb costs over the life of a mortgage loan. With interest rates constantly changing, there’s no telling how the rates will move next year or beyond. Couple low rates with an end-of-year builder or developer incentive and you might be able to find yourself a sweet deal. Esq. partner of PA, offering domestic › Jacqueline M. Lage, sophisticated a is founding representation Sibila in Lage real estate a boutique corporate law firm matters; SibilaLage.com. and international clients legal and 68