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Working with an Agent benefits You – by Chris Mygatt, 9/30/2019

 

Working with an Agent Benefits You

It’s no surprise that buying or selling a home can be an overwhelming, complex process, but working with a real estate professional can make the entire experience smoother and less stressful.

 

An experienced agent has the local expertise, marketing knowledge and familiarity with transaction requirements to guide you every step of the way. Here are a few reasons why working with an agent can benefit you.

 

  1. If you’re a buyer, there’s no substitute for an experienced agent who knows exactly what you are looking for and has deep knowledge of area neighborhoods. An agent can arrange for you to visit homes that interest you, at your convenience. They also have access to homes that are not yet listed, giving you a leg up over other buyers, which can be crucial in a competitive market.

 

  1. Although it’s easy to search endlessly for properties online, it’s not a substitute for having an agent assist you in your search. They can quickly conduct searches to find homes that meet your criteria and contact listing agents to set up appointments for viewing. And if you’re selling, an agent can field these calls for you, make appointments and answer questions.

 

  1. An agent can provide a competitive market analysis (CMA) that shows comparable properties in your area that are on the market or have recently sold. This can help you price your home right the first time, decreasing the chances of price reductions or your home lingering on the market.

 

  1. If you’re looking for a new home while trying to sell your current residence in the same area, it’s much simpler to work with one agent who can list and market your current property and help you find your new home. Since the same agent will work closely with you throughout the process, they will know you and your specific needs, make scheduling easier and reduce the stress of a dual transaction.

 

  1. An agent can help you negotiate the complex terms of your contract. Selling or buying a home involves dealing with multiple contacts and contracts, including the buyer or seller, their agent, home inspection company, appraiser, banks and sometimes attorneys. Your agent can help you navigate the entire process in a timely manner, so you can experience a smooth and seamless transaction.

 

If you are considering selling your home or purchasing a new one, contact a Coldwell Banker Residential Brokerage independent agent today or visit ColdwellBankerHomes.com. A Coldwell Banker-affiliated agent can advise you on what you need to know so you can make the best possible decision.

By | September 30th, 2019

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

 

 

 

 

 

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Spring Buying Season is looking up – Chris Mygatt, April 17th 2019

Spring Buying Season Is Looking Up

Despite economists’ earlier predictions that interest rates would continue to climb in 2019, there is some good news for home buyers: Lower mortgage rates, rising inventory and slower home-price growth indicate this could be a solid spring buying season.

Mortgage rates unexpectedly started falling at the beginning of the year, bringing more buyers into the market. In an interview with HousingWire.com earlier this month, Lawrence Yun, chief economist for the National Association of Realtors®, said that six months ago he thought mortgage rates might hit 6% this year, but now he’s calling for rates to remain in the 4% to 4.5% range in 2019.

The inventory increases in recent months indicate more homeowners are putting their properties up for sale, according to an April 1 article on Kiplinger.com, which reported total inventory in the U.S. was up 3.2% in February from a year earlier.

Yun predicts strong demand this spring for houses near or below the U.S. median price of $250,000 because of low mortgage rates and the good jobs market. However, he anticipates reduced demand for homes priced above $750,000, mainly because of tax code changes that took effect over a  year ago.

All in all, the housing market appears to be heating up this spring.

As a buyer, of course, you can’t control factors that could affect interest rates, but here are a few things you can control that will determine the rate a lender gives you on your mortgage:

Down payment. If you can afford a higher down payment, you likely will get a lower interest rate because you’re reducing the lender’s risk.

Credit rating. Review your credit score. A sound financial track record of repaying debts and a solid credit score may help you lock in a loan at a lower interest rate. Seeking a mortgage pre-approval may also benefit you in this competitive selling environment.

Debt-to-income (DTI). The percentage of your debt payments to your monthly income can also play a role. The lower your DTI, the better. To lower your DTI, try to pay off the debt with the highest monthly payment.

Stick with your budget. Keep in mind your housing priorities, preferences and desired locations when searching, and always remember your budget. Don’t get caught up in a bidding war and price yourself higher than you can afford.

Selecting an experienced local agent who can guide you through the entire process is invaluable. If you are considering listing your property or looking for your dream home this spring, get started by contacting a Coldwell Banker Residential Brokerage independent agent today.

By | April 17th, 2019

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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Tips for First-Time Home Buyers

 

Tips for First-Time Home Buyers

Buying your first home can be intimidating, but it doesn’t need to be. Understanding every step of the process and planning ahead to avoid potential setbacks can help ensure a successful experience.

Are your finances in order? Are you aware of closing and insurance costs, as well as property taxes? Do you understand escrow? Do you know how much real estate you can afford to buy?

Making the transition to first-time homeownership may seem daunting as you learn new terms, provide proper documentation for financing and find out how many pieces need to fall into place for the home purchase to be approved and completed. While it’s easy to turn to the internet for answers, some issues will not be easily resolved with an online search.

In its 2018 Profile of Home Buyers and Sellers, the National Association of REALTORS® (NAR) reported that first-time buyers made up 34 percent of all home buyers, about the same percentage as the past couple of years. In addition, 87 percent of buyers purchased their home through a real estate agent.

If you are considering purchasing your first home, here are a few points to keep in mind throughout the process:

  1. It is important to understand the financial aspects involved in buying a home. For example, you need to set a realistic budget for an affordable mortgage payment. Compile all the necessary financial documents, save up for a down payment and improve your credit if it is not already rated very good to excellent. According to the NAR’s 2018 Profile of Home Buyers and Sellers, 88 percent of all buyers financed their homes. Of those, the majority paid 10 percent of the price as a down payment and financed the remaining 90 percent. If you don’t know where to start, a mortgage advisor can help.

 

  1. Consider all the costs involved in buying and owning a home, including principal and interest on the loan, taxes, insurance and inspection costs. Also remember to think about future costs like utilities, maintenance, commuting, HOA fees and possible upgrades.

 

  1. If you do not understand a term or do not know what to do next, always consult an expert. An experienced real estate professional can help you find a property, negotiate the deal and guide you through every step of the home buying process.

 

To learn more about how to start planning for your first home purchase, contact a Coldwell Banker Residential Brokerage independent agent today.

 

By | March 18th, 2019

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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Home prices, Mortgage Rates to rise in 2019 – Chris Mygatt

 

Home Prices, Mortgage Rates to Rise in 2019

Buying a home will be more expensive in 2019 as mortgage rates and home prices rise, according to economists with the National Association of Realtors® and realtor.com®.

NAR’s chief economist Lawrence Yun predicts home prices will continue to rise in 2019, but at a slower rate, with the national median home price increasing to $266,800, up 3.1% from 2018. Danielle Hale, chief economist at realtor.com®, provides a similar forecast, predicting that prices will rise 2.2% nationally. These increases are down from nearly 5% in 2018 and more than 5% in 2017. In addition, Yun expects home sales to flatten and become more stable in 2019, rising by just 1%.

Hale said the 2019 housing market will see modest inventory gains of less than 7%, but many of those properties will be in the mid to higher-end price range. And with mortgage rates expected to hit 5.5% by the end of the year, Hale estimates that the expected increase in prices and interest rates translates to an 8% increase in the average monthly mortgage payment. That will put homeownership out of reach for some, including cash-strapped first-time home buyers. However, as more buyers are priced out of the market, those who are able to remain will find less competition.

In recent interviews with USA Today, both Hale and Yun offered some advice for sellers and buyers in 2019:

Hale said sellers should price their home realistically and be mindful of competition, especially for more expensive properties, and be prepared to reduce the price or offer other incentives to close a deal.

Since there is less competition among buyers and will be more inventory, buyers should take their time to find a home that fits into their budget, Yun said.

Meanwhile, there is positive news. The overall health of the economy is good, Yun said in presenting his 2019 housing and economic forecast in November 2018. Yun cited low unemployment, record high job openings, historically low jobless claims and wages starting to increase as positive signs supporting the housing market, even as interest rates rise.

If you are considering listing your property in 2019 or looking for your dream home, get started by contacting a Coldwell Banker Residential Brokerage independent agent or visiting ColdwellBankerHomes.com to view all properties for sale in your area.

By | January 11th, 2019

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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Conquering the clutter before the spring selling season – Chris Mygatt December 2018

Conquering the Clutter Before the Spring Selling Season

If you plan to put your home on the market this spring, one of the first steps you should take is corralling the clutter and getting your home organized. There’s a lot to do before the for-sale sign goes up, and spring will be here before you know it, so why not start the process after the holidays. Here are a few ideas to get you started.

Sort through decorations. Make the dreaded annual ritual of taking down decorations more productive by using it to begin decluttering. Before stuffing all your decorations back into plastic bins, take stock of everything you have – lights, wreaths, figurines – then toss items that don’t work and donate decorations you no longer use. In the end, you’ll likely have fewer containers to stow, freeing up space in storage areas.

Get one, donate two. For each gift received – an article of clothing, toy or gadget – donate or get rid of two counterparts. As you put away new possessions, take a little extra time to scour closets and bookcases and weed out worn-out items or those your kids have outgrown. Whether you donate, sell or throw them out, you’ll be making progress toward preparing your house for the spring market.

Depersonalize your home. Once you finish your post-holiday decluttering, it’s time to do a sweep of tables, dressers, shelves and the mantle to clear out personal items such as knickknacks and family photos. The goal is to make buyers feel like your home could potentially become theirs.

Scale down furniture. Nearly every home shows better with less furniture, so remove excess or older furniture to make your home look more spacious. While you might think rooms look empty, it will enable buyers to envision their own furnishings and belongings in the same space.

Rent a storage unit. Once you’ve cut the clutter, consider renting a storage unit for the furniture and other things you’ve removed. That way, you won’t have to store them in your basement or garage when it comes time to stage and show your home. And here’s an added bonus: Taking care of this now means you’ll have one less chore to do when it’s time to move!

If you are considering listing your property this spring, contact a Coldwell Banker Residential Brokerage independent agent today or visit ColdwellBankerHomes.com. A Coldwell Banker® affiliated agent can provide guidance and advice as you prepare to sell your home.

By | December 3rd, 2018

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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The Benefits of Hiring a Real Estate Agent – 9/17/2018

The Benefits of Hiring a Real Estate Agent

While buying or selling a home can be a complex process, working with a real estate agent can make things easier and more efficient.

A local Colorado agent has the area expertise, marketing knowledge and familiarity with transaction requirements to guide you step by step through the entire process, keeping everything on course. Here are just a few of the many benefits of working with an experienced agent for your home purchase or sale.

1. If you are looking to purchase a property, there’s no substitute for a professional agent who knows what you are looking for, has deep knowledge of neighborhoods and can help you find a perfect match. An agent can arrange for you to visit homes that interest you, at your convenience. Many agents even have access to homes that are about to be listed, which could help you in areas where homes are selling quickly.

2. Although the internet makes it easy to search for properties for sale, it doesn’t take the place of having an agent assist in your search. Agents can quickly conduct searches to find homes that meet your criteria and call listing agents to set up appointments for viewing. If you’re selling, an agent can field these calls for you, make appointments and answer questions.

3. An agent can provide a competitive market analysis (CMA) that shows comparable properties that are currently on the market or have recently sold. This can help you price your home right the first time, an important factor that minimizes the chances of price reductions or having your home languish on the market.

4. If you’re looking for a new house while trying to sell your current home in the same area, it can greatly simplify the process if you work with one agent to list and market your current property and help you find your new home. Since the same agent will work closely with you throughout the process, they will know you and your specific needs and make scheduling easier.

5. An agent can help you negotiate the complex terms of your contract. Selling or buying a home involves dealing with multiple contacts and contracts, including the buyer or seller, their agent, home inspection company, appraiser, banks and sometimes attorneys. Your agent can help you navigate the entire process in a timely manner, so you can experience a smooth and seamless transaction.

If you are considering listing your property or purchasing your dream home, contact a Coldwell Banker Residential Brokerage independent agent today or visit ColdwellBankerHomes.com. A Coldwell Banker® affiliated agent can provide guidance and advise you on what you need to know so you can make the best possible decision.

By | September 17th, 2018

About the Author:

 A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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A Survival Guide for Spring – by Chris Mygatt, April 17th, 2018

 

A Survival Guide for Spring

Real estate agents are reporting increased showings at open houses, bidding wars, and multiple offers over asking price within days, sometimes even hours.  Basically, it’s a jungle out there.

Before you jump into the fray, ask a Coldwell Banker Residential Brokerage affiliated sales professional to guide you through the process.

As a homebuyer, this time of year and competitive environment can seem overwhelming, but it doesn’t have to be. As you enter the busiest selling season, here are a few tips for both buyers and sellers that should make the entire process easier.

Buyers, take the time to review your credit score. A sound financial track record and solid credit score may help you lock in a loan at lower interest rates, and try to obtain a mortgage pre-approval, which you may need in this fast-paced selling environment.

Keep in mind your housing priorities, preferences and desired locations when hunting, and remember your budget. Don’t get caught-up in the emotional drama of bidding, and price yourself higher than you can afford. Of course, select and work with an affiliated Coldwell Banker Residential Brokerage sales professional who will guide you through the entire process.  A local real estate expert with years of negotiating experience is invaluable when it comes to closing the deal in this competitive market.

Sellers, while homes are selling faster, you still need to do your homework as well.  Do some spring cleaning, painting and sprucing.  Be forewarned that buyers are still looking for a great deal, so ensure that your home is priced accordingly and in good condition. Again, work with a local real estate expert who can advise you on a pricing and marketing strategy.

For those sellers sitting on the fence, don’t try to time the market. By the time most sellers sense a shift, the tables have typically already turned. Focusing instead on lifestyle needs is usually the better option.

For survival guidance during the spring selling season for buyers and sellers, contact a Coldwell Banker Residential Brokerage affiliated sales professional today. While the process may be challenging, your sales associate will lead your way.

By | April 17th, 2018

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike Denver and regularly participates in actively helping many other non-profit organizations in Colorado.

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10 things you need to know about the new tax law – Bill Bischoff

 

Reuters

Paul Ryan after a closed conference meeting on Capitol Hill on Dec. 12, 2017.

The Tax Cut and Jobs Act was passed by Congress and will be signed by President Trump. The final bill reflected some compromises and is substantially different than the earlier House and Senate bills. The new law includes many expected changes, some unexpected ones, and some changes that were expected but didn’t make the cut. Here are the most important things that individual taxpayers need to know.

1. New individual tax rates and brackets

For 2018 through 2025, the new law keeps seven tax brackets, but six are at lower rates. In 2026, the current-law rates and brackets would return. The temporary rate brackets under the new law are as follows.

Single

Joint

Head of
household

10% tax bracket

 $0 – $9,525

$0 – $19,050

$0 – $13,600

Beginning of 12% bracket

$9,526

$19,051

$13,601

Beginning of 22% bracket

$38,701

$77,401

$51,801

Beginning of 24% bracket

$82,501

$165,001

$82,501

Beginning of 32% bracket

$157,501

$315,001

$157,501

Beginning of 35% bracket

$200,001

$400,001

$200,001

Beginning of 37% bracket

$500,001

$600,001

$500,001

Most folks will benefit from the new rates, but some who are currently in the 33% marginal tax bracket will find themselves in the 35% marginal bracket next year. This unfavorable change will mainly affect singles and heads of households with taxable income between $200,000 and $400,000. However, the new lower rates on income below $200,000 will offset some or all of the negative effect of being in the 35% marginal bracket. For comparisons, see the table at the bottom of this story for the 2017 rate brackets.

Year-end planning impact: Most individuals will benefit from year-end planning moves that push income into next year and pull deductions into this year.

2. No change in taxes on long-term capital gains and dividends

The new law retains the existing 0%, 15% and 20% tax rates on long-term capital gains and dividends. For 2018, the rate brackets are as follows.

Single

Joint

Head of
household

0% tax bracket

 $0 – $38,599

 $0 – $77,199

$0 – $51,699

Beginning of 15% bracket

$38,600

$77,200

$51,700

Beginning of 20% bracket

$425,800

$479,000

$452,400

Year-end planning impact: These brackets are almost the same as what they would have been under old law, with the only change being in the way the inflation adjustment for 2018 is calculated. Therefore, the traditional year-end tax planning strategies for securities held in taxable brokerage firm accounts still apply.

3. No mandatory FIFO stock basis rule

Starting next year, the Senate version of the tax reform bill would have forced you to use the first-in-first-out (FIFO) method to calculate the tax basis of shares that you sell from taxable accounts. If the price of the shares stair-stepped higher as you bought them, having to use the FIFO method would have meant that your taxable gain would be figured by treating the oldest and cheapest shares as being sold first. That would maximize your gain and maximize the resulting tax hit. Fortunately, this proposed change didn’t make the cut, so it’s business as usual.

Year-end planning impact: None. You need not sell shares before year-end just to avoid the now-discarded mandatory FIFO stock basis rule. Good!

4. Higher standard deductions, but no more personal and dependent exemption deductions

The new law almost doubles the standard deduction amounts, starting in 2018. However, personal and dependent exemption deductions, which would have been $4,150 each for 2018, are eliminated. Obviously, these changes will benefit some taxpayers and harm others. If you have many dependents, you may not be pleased. The 2018 standard deduction amounts are as follows.

• $12,000 for singles (up from $6,350 for 2017)

• $24,000 for joint-filing married couples (up from $12,700)

• $18,000 for heads of households (up from $9,350)

Additional standard deduction amounts for the elderly and blind are still allowed.

5. New limits on deductions for state and local taxes

Under old law, you could claim an itemized deduction for an unlimited amount of personal state and local income and property taxes. You could also choose to forego any deduction for state and local income taxes and instead deduct state and local general sales taxes.

Also see: The Trump tax calculator — will you pay more or less?

Starting next year, the new law limits your deduction for state and local income and property taxes to a combined total of $10,000 ($5,000 if you use married filing separate status). Foreign real property taxes can no longer be deducted. So no more property tax write-offs for your place in Cabo. However, you can still choose to deduct state and local sales taxes instead of state and local income taxes.

Year-end planning impact: Traditional year-end tax planning advice includes prepaying state and local taxes that would otherwise be due early next year. That way, you get a bigger deduction on this year’s return. However, the new law says you cannot get any tax-saving benefit from using this strategy to prepay state and local income taxes. Specifically, you cannot claim a 2017 deduction for state or local income taxes that are imposed for a tax year beginning after Dec. 31, 2017. How this rule could be enforced is a mystery. The good news: you can still prepay state and local property taxes before year-end and claim a 2017 deduction. That could be a really good idea in view of the new $10,000/$5,000 deduction limitation that takes effect next year. However, if you will be an alternative minimum tax (AMT) victim this year, deductions for state and local property taxes (prepaid or otherwise) aren’t allowed under the AMT rules. So prepaying could do you little or no tax-saving good.

6. New limits on home mortgage interest deductions

Effective next year, the new law reduces the maximum amount of mortgage debt to acquire a first or second residence for which you can claim itemized interest expense deductions from $1 million (or $500,000 if you use married filing separate status) to $750,000 (or $375,000 if you use married filing separate status). However, this change doesn’t affect home acquisition mortgages taken out under binding contracts in effect before Dec. 16, 2017 as long as the home purchase closes before April 1, 2018.

Also, the old-law $1 million/$500,000 limits continue to apply to home acquisition mortgages that were taken out under the old-law rules and are then refinanced after this year (as long as the refinanced loan principal doesn’t exceed the old loan balance at the time of the refinancing). Starting next year, the new law also eliminates the old-law rule that allowed interest deductions on up to $100,000 of home-equity loan balances.

7. No change in home sale gain exclusion rules

The new law preserves the valuable break that allows you to potentially exclude from federal income taxation up to $250,000 of gain from a qualified home sale, or $500,000 if you are a married joint-filer. The earlier House and Senate bills both included restrictions on this break, but none of the proposed changes made the cut. So it’s business as usual. Good!

8. Expanded medical expense deduction for 2017 and 2018

The House version of the tax reform bill would have killed the itemized deduction for medical expenses. Instead the new law preserves the deduction and actually expands it to cover medical expenses in excess of 7.5% of adjusted gross income (AGI) for 2017 and 2018 (the old-law deduction threshold for 2017 was 10% of AGI).

Year-end planning impact: Since it is now easier to exceed the percent-of-AGI deduction threshold, consider loading up on elective medical expenses, such as vision care and dental work, between now and year-end if that would net you a bigger 2017 deduction.

9. Education tax breaks preserved

The new law leaves existing education-related tax breaks in place.

Year-end planning impact: If your 2017 AGI allows you to qualify for the American Opportunity higher-education tax credit (worth up to $2,500 per qualifying undergraduate student) or the Lifetime Learning higher-education tax credit (worth up to $2,000 per tax return and covering most postsecondary education expenses including graduate school), consider prepaying tuition bills that are due in early 2018 if that would result in a bigger credit on this year’s Form 1040. Specifically, you can claim a 2017 credit for prepaying tuition for academic periods that begin in January through March of next year.

10. Other important changes and non-changes

• Starting next year, you will not be able to reverse the conversion of a traditional IRA into a Roth account. Under the old-law rules, you had until October 15 of the year after an ill-advised conversion to reverse it and avoid the conversion tax hit. At this point, it is not clear if this change would prevent you from reversing a 2017 conversion by 10/15/18 or if would only prevent you from reversing a conversion done in 2018 and beyond. So if you have a 2017 conversion that you already know you want to reverse, get it reversed before year-end to be on the safe side.

• Unfortunately, the new law retains the individual alternative minimum tax (AMT), but the AMT exemption deductions are significantly increased and phased out at much higher income level, starting next year. For many folks AMT exposure was caused by high itemized deductions for state and local income and property taxes and lots of personal and dependent exemption deductions. Those breaks were disallowed under the AMT rules. With the new limits in deductions for state and local taxes, the elimination of personal and dependent exemption deductions, and larger AMT exemption deductions, many previous victims of the AMT will find themselves off the hook, starting next year.

• Starting next year, the maximum child credit is increased to $2,000 per qualifying child, and up to $1,400 can be refundable (meaning you can collect it even if you don’t owe any federal income tax). In addition, a new $500 nonrefundable credit is allowed for qualified non-child dependents.

• Starting next year, deductions for moving expenses and most miscellaneous itemized expenses are eliminated.

• Starting next year, itemized deductions for personal casualty and theft losses are eliminated, except for personal casualty losses incurred in a federally-declared disaster.

• Starting in 2019, you will no longer be able to deduct alimony payments if they are required by a divorce agreement entered into after 12/31/18. Recipients of nondeductible payments won’t have to include them in taxable income.

• Tax breaks for adoption expenses are preserved.

• The tax credit for qualified plug-in electric vehicles is preserved. For details on this credit, see: You can get a $7,500 tax credit for a new electric vehicle.

• Starting next year, the unified federal gift and estate tax exemption will basically double — to about $11.2 million or $22.4 million for a married couple. Wow! That is indeed a tax break for the rich.

The last word

This isn’t really the last word. For the next few months, you will see many more words about other changes in the new law along with more details and analysis and tax planning strategies. My next column will cover the 10 most important changes for small-business owners. So please stay tuned.

Table: 2017 individual federal income tax brackets

Single

Joint

Head of
household

0% tax bracket

$0 – $9,325

 $0 – $18,650

$0 – $13,350

Beginning of 15% bracket

$9,326

$18,651

$13,351

Beginning of 25% bracket

$37,951

$75,901

$50,801

Beginning of 28% bracket

$91,901

$153,101

$131,201

Beginning of 33% bracket

$191,651

$233,351

$212,501

Beginning of 35% bracket

$416,701

$416,701

$416,701

Beginning of 39.6% bracket

$418,401

$470,701

$444,551

 

 

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Reality Check with Chris Mygatt – July 25, 2017

Vacation Homes Offer Great Income-Generating Potential

The arrival of summer is always a popular time to scout for the perfect vacation home, whether it be in the mountains or near the beach. Many people dream about purchasing a vacation home and there are many benefits to owning one. Not only can the home serve as a family retreat, it can also serve as a dream home for eventual retirement.  Additionally, vacation property owners who are open to renting their properties during peak season will often discover that the rental income generated can help offset the cost of the mortgage.

In the recently published National Association of REALTORS® (NAR) 2017 Investment and Vacation Home Buyers infographic, 42 percent of vacation home buyers plan to use their property for vacations or as a family retreat. The same chart shows that 37 percent of investment property buyers purchased to generate income through renting the property.

Given the rising popularity and availability of online resources for owners to manage short-term and long-term property rentals throughout the country, it’s no surprise that there was increased interest in purchasing second homes in 2016.  According to NAR, 44 percent of investors, and 29 percent of vacation buyers, did or tried to rent their property last year and plan to do so in 2017 – saving them hundreds or thousands of dollars.

Regardless of the reason, over the decades owning a second or more homes has typically generated income because real estate offers a tangible asset that appreciates with time, and offers many tax and practical advantages. You can’t live in a mutual fund, stock or bond, but you can live in a vacation property whenever you want or need to.

If you are considering the purchase of a vacation home, it helps to find a real estate agent who has a deep understanding of the local market. To learn more, visit www.ColdwellBankerHomes.com.

By | July 24th, 2017

About the Author:

A real estate veteran with more than two decades of experience, Chris Mygatt is the President and Chief Operating Officer of Coldwell Banker Residential Brokerage in Colorado. When not overseeing the daily operations of Colorado’s largest real estate and relocation company, Chris enjoys Colorado’s active outdoor lifestyle including cycling, skiing and hiking, and is an avid pilot, sea captain and scuba diver. Chris is also a strong supporter of Habitat for Humanity, Angel Flight, Up with People, Bike D

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