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.
- 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.
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
Posts
