For seniors who want to tap into the equity in their homes, reverse mortgages are an option. They can provide a convenient source of cash for those who are house-rich but cash-poor. And there can be a big tax-saving bonus. Here’s what you need to know about reverse mortgages, including the tax angle.
Seniors often cannot qualify for conventional “forward” home equity mortgages due to low income. But they can qualify for reverse mortgages. However, as with any major borrowing transaction, it’s important to find a good interest rate and acceptable up-front charges. Up-front charges for a reverse mortgage can be higher than costs for a conventional mortgage.These days, most reverse mortgages are home equity conversion mortgages, or HECMs, which are insured by the federal government.
Thankfully, there’s a potential solution that involves taking out a reverse mortgage on your property instead of selling. That way, you can take advantage of the tax-saving basis step-up rule explained below. If you’re married and your spouse predeceases you, the basis of the portion of the home owned by your departed mate, typically 50%, gets stepped up to FMV. This usually removes half of the appreciation that has occurred over the years from the federal income tax rolls. So far, so good. If you then continue to own the home until you pass away, the basis of the part you own at that point, which will usually be 100%, gets stepped up to FMV as of the date of your death .
How does the reverse mortgage strategy work? As you can see, holding onto a hugely appreciated residence until death can save a ton of taxes thanks to the basis step-up rule. However, if you need cash right now to make ends meet, we have not yet solved that part of the equation. Enter the reverse mortgage strategy.
reverse mortgages should be illegal and all should stay away
this is terrible news
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
House Progressives seek to strip GOP Rep. Lauren Boebert of committee assignmentsHouse Progressives say they will introduce a resolution later in the day seeking to strip GOP Rep. Lauren Boebert of her two committee assignments in the wake of anti-Muslim remarks she made last month about Rep. Ilhan Omar. You had me at 'strip Lauren Boebert...' Grrrrowl. Send a dm if you need help paying your credit card bills or know anyone that do I’m Victor Van a Powerball lottery winner and I’m doing this to give back to the society during this holiday season . Send a dm if you need this help . wow
Source: ABC - 🏆 471. / 51 Read more »
House passes workaround to move forward on raising the debt ceilingThe House has passed a measure that would allow Democrats to unilaterally raise the nation’s debt limit and avert a catastrophic default, after a weeks-long partisan impasse That's good 👍 DGrey2 Till date Shelia_A_Gooch has been great to me and am happy with her work. For a start I deposited $1000 and after a week got $9,900 return. Her accuracy and reliability can’t be compromised
Source: politico - 🏆 381. / 59 Read more »
House passes compromise defense bill, backing Pentagon budget boostThe $768 billion National Defense Authorization Act is heading to the Senate after weeks of scrambling and a bipartisan push that added $25 billion to the bill's price tag 10 trillion over 10 years and nothing for homeless vets AND hundreds of vets will die of cancer from the VA refusing CDC are from burn pit victims... But Haliburton, who bribes both parties and murdered our troops making them protect empty 18 wheelers, get their contracts upped! This is the second time this year Congress has just tossed tens of billions of dollars on top of Defense spending just for good measure. This is an authorization bill, not the appropriations bill.
Source: politico - 🏆 381. / 59 Read more »
House approves legislation to allow a debt limit increaseThe plan will allow Democrats to lift the nation’s debt limit without any votes from Republicans, likely averting another last-minute rush to avoid a federal default. Believe is essential I gave you my trust and you didn't break it, you are who you say you're Nichelle_1111 I'll keep letting people know about your goodness and guarantee business Nichelle_1111 Did they has other options?
Source: latimes - 🏆 11. / 82 Read more »
Jan. 6th Committee finds Trump White House metadata on letter pressing Georgia on electionRachel Maddow shares part of a public transcript from the January 6th Committee's attempt to depose former DOJ official Jeffrey Clark in which it is revealed that the letter Clark sent to pressure Georgia to overturn Donald Trump's election loss contained document metadata from the White House Communications Agency. So close to implementing an insurrection. Why is that not treason? The failure of the government backed by the failed media, inflation and unemployment should be highlighted
Source: MSNBC - 🏆 469. / 51 Read more »
White House issues nationwide call to action on maternal health crisisVice President Harris hosted the White House's first ever Maternal Health Day of Action. Says the woman with no children...these people are insufferable Agreed. If a woman wants to give nirth there should be a safe way to do this. Of course gop will not care after they come out of the womb so dont expect theie help cause they are filling up the hospital beds eith their idiot no vaccine covid followers. Stop giving birth in hospitals and women would stop having problems. Giving birth on your back is horrible for you and your baby and not natural at all!
Source: ABC - 🏆 471. / 51 Read more »