learn me buying 2nd home for tax shelter

i am told by my tax dude i need to buy a second home to save on taxs, have any of you done this, i am not asking where i am just asking does anyone know if it will really save me on my taxs? not rental property

You'll have additional mortgage interest and property taxes to deduct but it sure won't save you money overall. Unless there are special circumstances, you may need a new tax dude. Feel free to email me for specific questions!

thank you sir.

My second home saves me absolutely no money. I can't figure out any possible way that it could. You might indeed pay less in taxes, but that's only because you'd be generating gobs of tax deductible expenses. Spending your way to savings doesn't work.

I don't even think you can write off the mortgage interest on a house that is not your primary residence. I could be wrong, but I don't believe I am.

You can, at least if it's a rental/investment property.

However, while I don't agree with David Ramsey's teachings on a lot of things, I wholeheartedly agree with his opinion that you don't get or keep a mortgage for the tax write-off. That's just bad math.

Methinks you need a new tax dude.

Duke wrote: I don't even think you can write off the mortgage interest on a house that is not your primary residence. I could be wrong, but I don't believe I am.

You can! The mortgage interest from your main home or second home can be from the mortgage used to buy your home, a second mortgage, a line of credit, or a home equity loan.

My GRM brethren may wonder, what is a qualified home? A home includes a house, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. Mongo? Canoes? Trailers? Me thinks GRM may be overlooking some possible deductions!

Signed - Resident Tax Apprentice

Your Tax guy is an IDIOT!

We swim in different financial circles. I can't imagine a financial situation where my buying a second home COULD even save me money. I wish you the best of luck my friend.

My second home doesn't save me anything. I will get to write off the $3200 in roof repairs, but it still cost me that $3200. I'd rather keep the money and pay the taxes.

OK, I didn't think about that as I already live in Texas where we don't have state income tax. If you purchased a second home in a no tax state and could somehow (legally) have that as your residence, then yes, that can work.

Depends on where he is making his money.

DrBoost wrote: We swim in different financial circles. I can't imagine a financial situation where my buying a second home COULD even save me money. I wish you the best of luck my friend.

Out of state home, with no state tax as primary residence. Other then the IRS demanding that you have 6 months + 1 day's worth of receipts it makes sense on paper. I would save a fortune if it were so.

Datsun1500 wrote: In reply to Enyar: Which is why I asked for more information and said certain income, instead of just saying you need a new guy. Just like the 1099 thread, some people were telling the OP that he needed a bunch of forms, software, etc. when all he needed to do was put it on line 21... Can owning 2 houses save you money on taxes? Yes. Does it for 90% of people? Nope.

We need to differentiate a few different things here. Those are federal vs state taxes, saving money vs saving taxes, and the other is buying a second house vs moving and living in a second/different house in another state. If the argument is for state purposes and the tax accountant was suggesting you should move to a different state to avoid certain state income taxes you're going to have very specific situation for it to not only make sense from a tax perspective but also from a personal perspective. If that's the case, a few more details would have been nice. If reasonable assumptions could be made I think it's safe to say a 2nd house is not going to save you money overall.

In your defense, the OP does ask about saving taxes, not saving money. So actually the tax guy is right, most likely it will save you money on TAXES, but it's sure not going to help his bank account in the grand scheme of things.