Now is No Time to be Talking
About Changing Any Tax Laws
Any modifications to the interest tax deduction on mortgages
whether now or he future could threaten any recent development toward stabilizing of housing, drastically erode the prices and values of homes, wipe out the wealth accumulation of the middle-class and cripple economic growth.
As the number one advocate for homeownership, the National Association of Realtorsģ
steadfastly believes that the deduction of mortgage interest is essential to the U.S. housing market and economic stability.
the MID encourages home ownership by diminishing the expenses of home ownership, while it makes a big difference to middle-class families.
Now is no time to be talking about changing any tax laws, that could additionally impair any fragile housing market recovery,
plus a broader recovery of the job market.
One indisputable thing is that taking away the MID will reduce the rate of homeownership in America, Although we must take steps to see that the situations that led up to the synthetic inflated home ownership ratio of those bubble years will not return, plus we additionally must stimulate the environment for prolonged home ownership, that has proven to provide a myriad of social advantages for both families and communities.
Recent proposals have called for adjustments to the U.S. tax code, arguing itís a
mislaid opinion to say that the MID became a trigger of the housing bubble and is all of a sudden an element of the deficit issue, while itís been in the federal tax codes for over 100 years.
Reducing or taking away the MID becomes a de facto federal tax increase to homeowners, who already are paying 80 to 90 percent of the U.S. federal income tax. this share could become as high to 95 percent providing the interest deduction is taken away.
Taking away the MID should not be contemplated as an eliminating a homeowner tax break, but rather as increasing taxes upon the middle class. Additionally, housing equity has long been a major supply of monies for small businesses, while any adjustment to the MID will significantly hinder their ability to generate jobs.
Itís a major misconception in believing that only the affluent derive advantages from the MID, when it really primarily benefits middle- and lower income Americans. Just about two-thirds of families who take the MID are among middle-income producers and 91 percent of those who take the MID are earning under $200,000 per year.
While being a tenant provides absolutely zero tax breaks, purchasing a home to live in provides a number of tax benefits that allows homeownership to be more affordable. As a Real estate professional, I do not have the credentials to give client tax advice in detail , but I can guide you to the information needed to comprehend the tax advantages to owning a home.
Listed below are a just few of the better known tax breaks associated with owning a home, set out by attorney and author Stephen Fishman, who's
specialty is small business intellectual property and tax law.
Deduction for Home mortgage interest: Home owners can itemized deductions as high as $1 million for their principal residence and second home on interest they paid on mortgage loans. This single deduction could potentially cut borrowing costs by up to a third or more.
Deduction for Property taxes: Home owners can subtract any state and or local property tax
paid on the home from their federal income tax returns
Deduction for home buying expenses: A number of closing costs associated with a buying a home can also be deducted, such items as prorated interest expense on a new mortgage, origination loan fees (points), and prorated property tax paid at closing.
Deduction for selling a home. $250,000 to $500,000 exclusion of a home-sale: Home owners residing in their home during at least two of the previous five years previous to selling the property are excluded from paying federal income taxes on the bulk of their profits The rule is $250,000 for home owners who are single and for married homeowners filing jointly the deduction is $500,000 .
Deduction for 14 days of non-taxable income on rent: Home owners can receive rent their home for as long as 14 total days during the tax year resulting in zero tax on the monies received for rental income.
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Aug 22, 2011 By Gene Wright