Stonegate: buyer questions

[test]

You wanna know what's unfair?  You buy those upgrades with after tax income.  But every year you still have to pay taxes on those upgrades.  So you don't really own those upgrades, you're just leasing them from the government.

 

[usctrojancpa]

What I meant by fair is so if one seller chooses to do all upgrades through the developers (say $100k). That seller will have to pay tax on that 100k for however long the seller chooses to keep the house. Another seller chooses to do all upgrades through a third party contracter. That seller doesn't need to pay tax on any of the upgrades. Everything else equal those two houses are equal in value (from an appraisal standpoint).

This is just coming from someone who has no idea how property tax works.

In that sense, yes it is kind of unfair.  But remember that owner who does the upgrades after they close has to pay for the upgrades 100% out of pocket where the owner who gets them through the builder can finance most of them (if they are using a loan to purchase a home).  At the end of the day, we are talking about $100/year or $8/month difference in the property tax (that's assuming you are phased out of the property tax deduction on your taxes) which isn't even a rounding error in terms of the expenses of owning a home.

At what point do you start phasing out on your property tax deduction?

The property tax deduction is phased out through the AMT tax...it's a case-by-case situation for each tax payer so it all depends (something of $200k in AGI for the majority people is my guess).