Chanting at the Public Comment Meeting?

Chanting and singing at the public comment meeting? If that isn't irrefutable proof that an Emergency Manager is needed immediately, I don't know what is.

Housing Prices Up 32% in Detroit's Warrendale Neighborhood

Houses in Detroit's Warrendale Neighborhood

I was going over a list of houses sold in the Warrendale  neighborhood recently and prices paid for them. The exciting news is that the average sale price for homes in our area has gone up 32% in the past two years.

Prices are still much lower than they were prior to the beginning of the mortgage crisis. Regardless, the fact that they have climbed that much in spite of the problems that Detroit has is encouraging.

Just imagine what would happen if some of Detroit's problems were solved.

Therefore, my Featured Place to Live for this week is, well, everywhere. With this kind of improvement in the market, there really aren't any bad options.

Fear not, dear readers, I will be back next with a specific home in the neighborhood to recommend to you. Until then, I'm just too happy about the overall market.

7 Things That Should Be Changed in the Proposed Consent Agreement

Governor Rick Snyder unveiled his proposed consent agreement last Tuesday. Since then, there has been almost unending amount of howling from certain quarters within our community. Those complaints, by the way, came from many of those who were also opposed to the various reforms that we written into the new City Charter that was overwhelmingly enacted last year. Regardless of how much those individuals might protest, the fact of the matter is that consent agreement is likely coming very soon and it's probably the best thing for Detroiters.

With that in mind, I would like to offer seven specific suggestions that I believe Mayor Dave Bing as well as everyone on the City Council and Lansing should carefully consider.

#1. Guarantee Public Involvement in the Process

No matter what someone somewhere might plug into a spreadsheet, the fact remains is that it is our tax dollars that are being spent here and our futures that are at stake. While Governor Snyder was busy building his fortune, thousands of middle class families were fighting to make Detroit a place worth living in. Their efforts, quite frankly, are the main reason why this town is still standing.

If those families are going to be asked to continue the fight, and if new ones are going to asked to join in, then they must be guaranteed that they will have an opportunity to have their objections heard and their suggestions duly considered. There will unquestionably be a loud outpouring of people that my friend Jeff Wattrick of MLive.com refers to as "grape throwers" in his columns. It could be tempting to shut them out out of the process, but shutting them out also means shutting out the ordinary middle class families who have kept Detroit afloat for this long, which only gives those families yet another reason to leave.

Tip of the Week: Tax Benefits of Home Ownership

Home ownership is a big a part of the American Dream. When that dream becomes a reality, there are many great tax breaks that can come along with it. This tax season, I wanted to pass along a few tips from my friends at Jackson Hewitt Tax Service about the many credits and deductions that can add thousands of dollars to your refund.

“There are a wide variety of tax breaks available to existing homeowners and first-time homebuyers,” Mark Steber, chief tax officer at Jackson Hewitt Tax Service, explained in a statement. “Speaking with a local, knowledgeable tax preparer can help ensure taxpayers take advantage of all the home ownership-related credits and deductions for which they are eligible.”

For homeowners, Mr. Steber notes that there are several tax breaks available covering home-related areas, such as:  

Mortgage Interest

The amount of mortgage interest paid on a principal residence or second home is deductible and generally reported on Form 1098. Taxpayers can also deduct all the points paid to purchase the residence, even if some have been paid by the seller. If certain requirements are met, the points may be deducted in full in the year paid. Otherwise, they may be deducted over the life of the mortgage. Seller-paid points that taxpayers claim as an itemized deduction reduce the cost basis of the home. 

Buying a Home

Most of the expenses incurred when buying a home are not deductible. However, there are certain closing costs that are added to the basis of your residence. Keeping track of the basis of your home is important because when selling, it is needed to calculate any gain or loss.

Property Taxes
Taxpayers may deduct real estate property taxes in the year paid. They may be reported on Form 1098, the annual statement from the financial institution holding your mortgage. Taxpayers may also be able to deduct some of the taxes paid during closing. The taxes must be the responsibility of, and paid by, the taxpayer.

Energy Credits

There are energy credits available for making energy efficient changes to a home. For 2011, the credit is limited to 10% of the cost of improvements, up to a lifetime total of $500. The credit will be further limited for each category of improvement. 

Home Improvements

Home improvements are not generally deductible on a tax return. Instead, the cost of improvements is added to the basis of the home and helps keep any gain below the $250,000 ($500,000 if married filing jointly) exclusion amount when the house is sold.

For those who find themselves in the unfortunate position of a foreclosure or short sale on their home, there are tax breaks available as well. Foreclosures and short sales are treated as both a home sale and a canceled debt. When the house is a taxpayer’s primary residence, and they have lived in and owned the home for two of the last five years, any gain up to $500,000 on the disposition is tax-exempt. In addition, the canceled debt (mortgage still owed) is excluded from taxable income, as long as it is less than $2 million and is for the taxpayer’s principal residence. 

To learn more about home ownership-related tax benefits, please visit www.jacksonhewitt.com or call 1-800-234-1040 to find a local Jackson Hewitt office.

Knowing my about the tax benefits of home ownership is your Warrendale Tip of the Week.