Big win for homeowners thanks to housing lobby

Bloomberg.com reports "Housing Lobby’s Win Costing U.S. $600 Billion: Mortgages

Congressional efforts to reduce the U.S. deficit revived tax breaks for mortgage insurance and extended interest deductions for homeowners that will cost the government $600 billion over five years.

Among the provisions of the fiscal bill passed on January 1:

•  2007 tax break for homeowners whose debt is forgiven by lenders and preserved exemptions for profits on home sales, while maintaining mortgage-interest deductions

The moves could help a housing market that last year started to reverse a five-year slump that pushed the U.S. economy into the longest recession since the 1930s.

•  2013 Savings Homeowners will save about $100 billion this year from mortgage interest deductions  
• Borrowers with mortgage insurance, from private guarantors or the U.S. government, will be able to deduct their premiums. That perquisite had expired at the end of 2011. The change will apply retroactively to 2012 for homeowners making less than $110,000 a year and will remain in force this year. 

The bill also extended the ability for homeowners to avoid taxes when their debt is written off by lenders in so-called short sales, in which properties are sold for less than loan amounts, and in loan modifications meant to keep borrowers in houses. The forgiven amounts were treated as income before 2007 until the Mortgage Debt Relief Act was passed. That had been set to expire this week before the extension.

But beware.  Higher income hearings face a limit on deductions .

This week’s bill will also limit some mortgage-related deductions by reviving so-called Pease limitations for itemized filers including individuals earning more than $250,000 and couples with more than $300,000 in adjusted gross income. Taxpayers will gradually lose the value of deductions, reducing them to as little as 20 percent of what they had been, according to the NAR summary.

 Read the full story.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

Sphere: Related Content