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.