Basics Intermediate: What Tax Relief Can You Get for Your Home?

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1.
Which part of a home mortgage is tax-deductible for those who qualify for the deduction?
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Interest. Only the interest is deductible.
2.
Points charged by mortgage lenders are _______.
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To compensate the lender for various administrative fees. These fees can easily be as high as several thousand dollars.
3.
Which of the following is true regarding home improvement loan interest?
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The interest is deductible for capital improvements only. Capital improvements are those that increase your home's value, prolong its life or adapt it to new uses.
4.
The mortgage interest credit is available to first-time homebuyers with _______.
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Low incomes. This is a tax credit meant to help those at low income levels.
5.
Taxes held in an escrow account for property tax are only deductible if the money is actually used to pay your property taxes.
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True. You cannot deduct taxes held in escrow until the taxes are paid.