Home leasing tax deductibility - U.S.


B

Bob2006

If I lease a home, is the lease cost deductible similar to mortgage
interest?

We are looking at new housing, and a home we are looking at has a lease to
own option. We desire to evaluate the tax consequences of leasing vs.
owning.

Thought this would be an easy question, but did not see it when I
searched.

Thanks for any insights...
 
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P

Paul Thomas

Bob2006 said:
If I lease a home, is the lease cost deductible
similar to mortgage interest?

Nope. At least not for federal purposes. Some states (Jersey comes to
mind) allow a renters credit though. And leasing is the same as renting,
just a fancier term, which means you are paying a lot of rent.



We are looking at new housing, and a home we are looking
at has a lease to own option. We desire to evaluate the tax
consequences of leasing vs. owning.


Again, leasing is renting. No federal tax breaks for that.

Now, generally a lease-to-purchase establishes a higher rental payment
amount, and a resulting decrease in the final purchase price. Ask if that's
the case, and see if it's going to work for you.

Unless there's some uncertainty on your part about buying that property, or
ther are financial considerations that make waiting to buy more desireable,
purchase now instead of leasing for a time. Although the housing bubble has
shrunk recently, it's going to hit bottom soon (spring is my guess) and
start a modest climb again. Better to buy now thaan wait till the prices go
up and interest may get bumped again.
 
P

Phil Marti

Bob2006 said:
If I lease a home, is the lease cost deductible similar to mortgage
interest?
No. Lessees get no Federal tax deduction. There may be some sort of state
tax benefit available. Check your state's website or instruction booklet.
 
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J

johnsmith060

purchase now instead of leasing for a time. Although the housing bubble has
shrunk recently, it's going to hit bottom soon (spring is my guess) and
start a modest climb again. Better to buy now thaan wait till the prices go
up and interest may get bumped again.
Find another sucker to buy into that lie. Housing is a worthless
investment, and will be for the next 10-20 years. Ask the Japs if
buying in the 80s was a good idea. I think the answer today is the
same as it was 10 years ago...a resounding NO!

If interest rates go up even just a small amount, housing values will
go down, as Cheney would say, BIG TIME!!!!

Yours In Christ,
John
 

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