REALTORs® support the American dream of buying and home ownership - and many of us believe that support should be special for those who are financially qualified.
The National Association of REALTORs® legislative and business meetings Washington DC this month involved more than number of real estate agents urging lawmakers to “protect the American dream” of home ownership.
REALTORs® want to maintain the status quo on four tax code provisions - this would help homeowners, prospective buyers and the nation’s economy:
- Mortgage interest tax deduction
REALTORs® oppose any legislation that would reduce or eliminate the mortgage interest deduction, the federal income tax deduction for interest paid on debt secured by a first or second home. IRS Publication 936 provides detailed guidance on whether home mortgage payments are tax deductible.
- Property tax deduction
REALTORs® oppose any legislation that would reduce or eliminate the federal deduction for state and local property taxes.
- Capital gains
Homeowners are now allowed to exclude from taxation the first $250,000 ($500,000 for married couples) of capital gain upon the sale of their home - still a strong incentive for home buyers. IRS Publication 523 addresses the tax implications of the sale of your home.
- Mortgage Forgiveness Debt Relief Act of 2007
REALTORs® advocate extending the Mortgage Forgiveness Debt Relief Act of 2007, which is set to expire later this year on December 31, 2012.
This law directs the IRS not to tax homeowners who have had certain mortgage debt forgiven by their lenders. Before this law was started, this tax on so-called “phantom income” was challenging on two levels for people losing their homes in foreclosure. Why? "Forgiven debt" is generally taxable income.
Unless this tax law - protection for homeowners - is extended beyond December 31, 2012, millions of underwater homeowners will be hurt even more than they are now. They will be taxed on amount of money they were unable to pay to lenders - foregiven debt - prior to foreclosure.
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Source of information is article by Harvey S. Jacobs at WashingtonPost.com. This is for information only and not the providing of tax or legal services.
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