The new tax law that was signed into effect at the end of 2017 will affect all taxpayers. Homeowners should familiarize themselves with the areas that could affect them which may require some planning to maximize the benefits.
Some of the things that will affect most homeowners are the following:
Reduces the limit on deductible mortgage debt to $750,000 for loans made after 12/14/17. Existing loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap.
Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the existing mortgage being refinanced.
Repeals the deduction for interest on home equity debt through 12/31/25 unless the proceeds are used to substantially improve the residence.
The standard deduction is now $12,000 for single individuals and $24,000 for joint returns. It is estimated that over 90% of taxpayers will elect to take the standard deduction.
Property taxes and other state and local taxes are limited to $10,000 as itemized deductions.
Moving expenses are repealed except for members of the Armed Forces.
Casualty losses are only allowed provided the loss is attributable to a presidentially-declared disaster.
The capital gains exclusion applying to principal residences remains unchanged. Single taxpayers are entitled to $250,000 and married taxpayers filing jointly up to $500,000 of capital gain for homes that they owned and occupied as principal residences for two out of the previous five years.
Not addressed in the new tax law, the Mortgage Forgiveness Relief Act of 2007 expired on 12/31/16. This temporary law limited exclusion of income for discharged home mortgage debt for principal homeowners who went through foreclosure, short sale or other mortgage forgiveness. Debt forgiven is considered income and even though the taxpayer may not be obligated for the debt, they would have to recognize the forgiven debt as income.
These changes could affect a taxpayers’ position and should be discussed with their tax advisor.
Author:Tamer Gomaa Phone: 717-615-1515 Dated: January 8th 2018 Views: 188 About Tamer: Tamer has been helping his clients with their real estate needs since 2005 and received numerous awa...
RE/MAX Pinnacle embodies an enviable combination of entrepreneurial energy, comprehensive industry experience, and local market knowledge. This mix allows us to “out national” our local competition; thanks to our exceptional professional team and world-class infrastructure, and “out local” our national competition thanks to our laser-like focus on the specific markets in which we operate. Our highly productive team of residential sales specialists has elevated us as a leader in the many communities served throughout Central Pa. Our agents receive ongoing training and education, and they go above and beyond to deliver the diligent and ethical standard of care we are committed to providing. Contact our office anytime at 717-569-2222.
The Federal Housing Authority, operating under HUD, offers affordable
""Tamer Gomaa, is by far one of the most professional, courteous, and knowledgeable real estate agents that has worked with us in our home buying process. He patiently worked with our needs and choices to eventually find a home that was suitable for us. Without a doubt I would work with Tamer again, and most definitely recommend him to friends and family! Tamer is by far one of the best agents in the industry!
Tamer's expertise and knowledge of the market and beyond was crucial in helping us find the right home.
Tamer puts his clients needs and wants first!
Tamer is definitely an asset to RE/MAX!""