4. Putting my child on my home's title is a smart tax move.

Worries about taxes on a residence sometimes lead homeowners to fall for this myth.  It's a particularly tricky one, because it combines confusion about residential taxes with the even more complex estate-tax area.  "Sometimes we'll hear about taxpayers who, in doing some quick back-of-the-envelope estate planning, decide to put their home in the children's names," says Tollaksen.  "The thinking is: My son or daughter won't have to worry about this when I die."

The goals: Avoid probate, keep the home in the family and get the property out of the parent's estate for those tax purposes.  Such a move, however, could produce other tax problems for your children.

Unless the child moves into the newly deeded house with the parent and lives there long enough (two of the previous five years) to make the house the child's main residence, too, says Tollaksen, the son or daughter won't get the $250,000 or $500,000 residential tax break when the child later decides to sell.  Without establishing primary residency in the house, either before or after the parent passes away, the child's ownership is viewed as an investment property.

Other parents opt to simply add a child's name along with theirs on the title to the house, known legally as a joint tenancy.  It doesn't mean that all the owners live in the home, but simply that two or more people hold title to the property.  This, too, can produce tax complications.

Generally, when someone inherits a property, its value is stepped up.  That means when the owner dies, the property becomes worth its fair market value that day.  But if the child co-owns the property with his parent, the child doesn't get to fully use stepped-up basis.  Tax law considers the addition of the child's name to the title as a gift.  And, along with that half of the home, the child receives half the basis that his or her parent has in the property.

This is known as the property's carry-over basis. And it could be costly.  Consider, for example, that you bought your house many years ago and your basis in the property is $50,000.  You add your daughter to the title.  When you die, she inherits your half of the home, which by then is worth $250,000.  A buyer offers $300,000 for the home.

Pretty good deal, right?  From a real estate perspective, yes.  But not when it comes to your daughter's tax bill on the sale.  What had been done with the best parental intention turned out to carry a big price because of this homeownership tax myth.

5. If I take a capital loss when I sell my home, I can write it off.

This myth, like No. 2, was probably started by wishful homeowners.  Sorry, it's just as wrong.

It is true that real estate, like any other asset, has the potential to go down as well as up in value.  But unlike most of those other holdings, you cannot write off any loss you suffer if you must sell your main residence for less than what you paid.  That's because your residence, under tax law, is considered personal property.

"When you sell your home for a loss, it's not like other capital items," says Scharin.  "You don't get to deduct personal property that you sell for a loss."

"It's the same as any personal property that declines in value," says Luscombe, "like that old TV you sold to the neighbor kid so he could take it to college.  You sold it for much less than you paid, but you can't take a loss."  You do, however, have to pay tax on gains you make when selling personal property.

But at least you now know the difference between fact and fiction when it comes to your residential property, which will help you make appropriate real estate and tax decisions in the future.