If you're making a lot of money, buying a house can be a great tax break. That's because the interest you pay on a mortgage is tax deductible, as is the money you pay in real estate taxes. If you really want to see the savings this tax break provides, think about it in comparison to renting. If you're spending as much on your mortgage as you would on rent -- which is a fairly reasonable expectation in most cases -- a percentage of the money that goes to interest ends up back in your pocket, while all of your rent would stay with the landlord.

Owning a home might give you a tax break on the selling end, as well. If you sell a property for more than what you paid for it, plus the cost of any improvements you've made, you have a capital gain. That would typically mean you'd owe capital gains tax. But as long as you meet certain requirements regarding the length of time you lived in the home, the amount of the capital gain, and other real estate transactions you've made, you may be able to exclude some or all of the gain when you file your income tax return.

Which of the following is not tax deductible? The interest you pay on your mortgage Your real estate taxes The cost of home improvements

How does the capital gains tax break work? Click here for the answer!