Albert Einstein - (on filing tax returns) This is too difficult for a mathematician. It takes a philosopher.

Homeowners have the advantage of taking two considerable deductions on their federal income taxes - mortgage interest and property tax. In some circumstances additional deductions are also available.

Interest on loans to buy or build your home "acquisition debt" includes home mortgage loans used for home improvements and purchase as well as improvement loans on a second home.

Interest on up to $1million of acquisition debt is deductible for loans secured by a first or second home. A recreational vehicle or mobile home may qualify as a home for the regular income tax. Boats qualify, except when calculating the alternative minimum tax.

Mortgages taken out before October 14, 1987, get special treatment, as interest on the mortgages is fully deductible, even if it is more than $1 million.

Interest up to $100,000 of home equity loans is deductible; regardless of how much the residence costs. The $100,000 limit applies to the total of all home equity loans.

Property tax deductions for a home that is being sold must be apportioned between the buyer and the seller, even if the full tax is paid by only one of you.

Selling real estate became easier for tax purposes on May 6, 1997. Since then couples can exclude gains of up to $500,000 from capital gains taxes. Singles can exclude up to $250,000. You do not have to buy a more expensive replacement home to avoid the tax.

Consult your tax advisor for detailed information.