On Tax Breaks, Change is In The Air

FRIDAY FACTS

March 28, 2014

 

ON TAX BREAKS, CHANGE IS IN THE AIR:

From an article in Banker and Tradesman by Kenneth Harney

  • From the chair of the House Ways and Means Committee, Rep. Dave Camp, this proposal has been worked on for 2 years, with extensive public hearings and significant research.
  •       It won’t be enacted in the coming election year, but expect to see core concepts reappear in 2015.
  •       Even supporters of real estate tax benefits concede that housings special         carve-outs will be less compelling to many homeowners when they can just take the standard deduction and save more than by itemizing.
  •       The vast majority of individuals and corporations will have lower marginal rates of 10% and 25% plus personal standard deductions of $22,000 for a married couple and $11,000 for singles.
  •       The $1 million limit on mortgage amounts qualifying for interest deductions will phase down to $500,000.  Existing mortgages over $500,000 are grandfathered for the life of the loan.
  •       There will be no interest write-offs on home equity loans unless the money is used to improve the property.
  •       To claim the capital gains exclusions upon sale of the home, the home must have been owned five of the preceding eight years.  Currently, it’s two of the preceding five years.
  •       Deductions for property taxes will end.
  •       Tax credits for energy saving improvements in the home will end.

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