A: If you lived in the condo half the year and no longer rented it, it would be a second home. You could deduct any mortgage interest and real estate taxes paid on the condo as part of your itemized deductions. You should maintain the depreciation schedule for your records because when you sell the property, depreciation factors can reduce your cost basis. When you sell a rental property at a loss, you can deduct the loss. When you sell a second home, the loss is considered personal and is not deductible. In both cases, a gain on the sale would be taxable. --
Q: My children either own or are beneficiaries of all my assets. Do I need a will or trust? -- R.W.,
A: These assets will bypass probate and transfer to them without a will or trust. However, probate may be desirable even when there are no probate assets because creditors rights to stake a claim against your estate terminate at the closure of the probate estate. Keep in mind you will lose any step-up in basis on the assets if children own them at your passing. --
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