In the final days and hours, the National Association of REALTORS® generated over 300,000 emails and telephone calls to members of Congress and held countless in-person meetings with legislators, all of which helped shape the final outcome of the new tax bill as it relates to housing.
This grass-roots effort was of significance to homeowners and the housing industry. NAR worked diligently with members of the House-Senate conference committee to help educate them on how to improve the final bill.
In the end, NAR saved the exclusion for capital gains on the sale of a home and protected the mortgage interest deduction for primary and secondary homes. Here is a summary of the results:
- Capital gains exclusion. In a huge win for current and prospective homeowners, current law is left in place on the capital gains exclusion of $250,000 for an individual and $500,000 for married couples on the sale of a home. Both the House and the Senate had sought to make it much harder to qualify for the exclusion.
- Mortgage interest deduction. The maximum mortgage amount for households deducting their mortgage interest has been decreased to $750,000 from the current $1 million limit on primary and secondary homes. The House bill sought a reduction to $500,000.
- State and local tax deductions. Both property taxes and state and local income taxes remain deductible, although with a combined limit of $10,000. Both the House and Senate bills sought to eliminate the state and local income tax deduction altogether.
- Pass-through entities. The bill significantly reduces the effective rate of tax on business income earned by independent contractors and income received from pass-through entities. This change will lower the taxes of many real estate professionals.
If you have questions, make sure you talk with your tax professional. Thank you for checking out this Fresh Blog. Happy holidays and CHEERS!
Sincerely, Kevin http://www.KevinGormanSells.com