Two Tax Benefits that Expired in 2011 Revived in 2013
These are two additional important aspects of the fiscal cliff deal that could help many homeowners. I did not see this when the Act was passed but the two additional benefits (in addition to the etension of the MFDRA) can help many home owners
The Fiscal Cliff deal had a couple more benefits for property owners than previously expected.
2 Key Homeowners Benefits.
1. Mortgage Insurance Premiums or guarantee fees for FHA, VA, Fannie or Freddie or A Rural Housing Loan can once again be written off if your household income does not exceed $110,000.
2.The Home Energy Improvement Tax Credit of $500 was revived for energy renovations done in 2012 and if doing them in 2013. This might include quite a number of energy efficiency items like new windows, doors, roofing materials etc.
For the underwater homeowners, the Mortgage Forgiveness Debt Relief Act was re-authorized at the Federal Level. States that have state income tax, may or may not be following this renewed act at the state level. CA has a bill moving through the legislative process but as of now, it is still in the process and if you are closing a short sale prior to it's passage, you will need to find out if the bill will be retroactive to Jan 1st, 2013.
High Income Sellers with an adjusted gross income over $250,000 as an individual or $300,000 joint filers, needs to check with their financial advisers as to what the new law provides for limiting some mortgage Interest, changes in capital gains tax and other write offs previously granted for 2012.
Other changes may be in the works but until they become law, the discussions are premature at this time.
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