Tax Reform Limit Of Mortgage Tax Deduction

Tax Reform Limit Of Mortgage Tax Deduction



Tax Reform – Limit of​ Mortgage Tax Deduction
A committee appointed by President Bush has come up with an​ alarming recommendation .​
They want to​ limit the​ tax deduction for mortgage interest!
Reform
Following his re-election,​ President Bush set up an​ aggressive agenda in​ which he hoped to​ reform social security and the​ tax code amongst other things .​
As with many things in​ the​ political world,​ this sounded easier done than it​ really was .​
With social security,​ political forces have forced the​ President to​ pull back from private accounts .​
With tax reform,​ a​ similar political and practical mistake is​ being made .​
Limited Deduction
The bipartisan tax reform committee appointed by President Bush is​ making a​ mess of​ things .​
They are proposing the​ elimination of​ the​ Alternative Minimum Tax,​ which is​ clearly a​ good thing .​
Unfortunately,​ they are also proposing a​ limit on​ the​ tax deduction you​ can take for mortgage interests .​
Although the​ final recommendations are not yet published,​ leaks have led to​ the​ belief the​ tax reform committee is​ going to​ propose the​ mortgage interest tax deduction be limited to​ the​ percentage of​ any loan that the​ Federal Housing Administration would write .​
Put another way,​ you​ would only be able to​ write-off interest on​ the​ first $315,​000 of​ a​ mortgage! on​ top of​ this disaster,​ the​ committee is​ proposing to​ eliminate the​ deduction for property taxes .​
Economic Disaster?
The implementation of​ the​ above recommendations would be an​ economic disaster for the​ United States .​
The real estate industry would suffer incredibly and the​ real estate boom would become a​ bust .​
in​ many parts of​ the​ country,​ a​ single family home averages well over $315,​000 .​
In San Diego,​ the​ average cost of​ a​ home is​ in​ the​ $600,​000 range .​
To get into such homes,​ many families apply for interest only loans to​ make ends meet .​
If they lose half of​ the​ interest deduction,​ default will not be far behind .​
Once again,​ we are faced with a​ situation where politicians just don’t get it .​
Our housing market is​ incredibly strong and they want to​ throw a​ wrench in​ the​ process .​
Developers and homeowner associations have vowed to​ fight this tax reform .​
You should as​ well if​ losing half of​ your deduction troubles you.




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