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Home-Mortgage Interest Deduction At Stake

Sunday, August 11, 2013 - 3:36 PM
The process that’s under way in Congress represents the most serious effort to simplify and reorganize federal tax law since the Tax Reform Act of 1986.

Staff members of the House and Senate tax-writing committees are busy putting together legislative drafts that may determine the fate of real estate’s most prized tax benefits — first and second home-mortgage interest deductions, property-tax write-offs, capital-gains exclusions and others.

Home-mortgage interest deduction at stake | Business & Technology | The Seattle Times
6
ShorebreakShorebreak2,368 posts since
Apr 6, 2010
Rep Points: 12,625
1. Monday, August 12, 2013 - 9:27 AM
"Another complication: Major tax benefits that have been in existence for decades, such as the mortgage-interest and property-tax deductions, are so welded into the system that eliminating them, or sharply reducing them, would send shock waves throughout the economy."

I serious doubt that they would even touch the tax benefit of mortgage interest; that which is on the table for tax negotiation does not indicate the risk at all.  The tax benefit of mortage is simply blent into the culture of American Dream and even the politicians dare not to change it for their own political career.  Nobody want the fame (i.e., blame in this case) of being the one to get rid of tax benefit of mortage interest. 
2
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,350
2. Monday, August 12, 2013 - 9:40 AM
Most taxpayers use the standard deduction. A couple would receive $12,200 in 2013 as the standard deduction. A home interest deduction on a $200,000 mtg at 4% would be $8,000, adding property taxes, and either state or sales taxes etc I think it would be very hard to get to the $12,200 automatic deduction. 

For a single person the standard deduction would be $6,100. 

There are a lot of tax credits that people use. Energy tax credits, tax credit for children, education tax credits, earned income tax credits.

The high income people have their deductions reduced. 
3
AllyAlly777 posts since
Jan 16, 2010
Rep Points: 2,263
3. Monday, August 12, 2013 - 1:54 PM
I really can't see any action by Congress to "simplify and reorganize federal tax law" coming down the pike. Too many special interests have their pet projects enshrined in the present tax law and would unleash millions, if not billions, of dollars in lobbyist expenses in order to dissuade any politician from changing the status quo. Another words, "fuhgeddaboudit".
3
ShorebreakShorebreak2,368 posts since
Apr 6, 2010
Rep Points: 12,625
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