May 16, 2024

homes for saleWith so much of the emphasis placed on the benefits to homeowners at risk of foreclosure, many consumers are unaware that the recently signed federal housing bill also benefits consumers who do not itemize their federal tax filings. Millions of homeowners are now allowed to claim a deduction for at least a portion of their local and state property taxes.  Although intended as a one-year economic relief measure, tax experts believe that the new deduction will become a permanent feature in the tax code.

It is estimated that 50 percent of homeowners itemize their returns, but one-third of them do not have any mortgage debt on their property and therefore do not claim mortgage interest as a deduction.  This provides greater tax fairness to a large group of homeowners who choose to file a standard deduction and also pay local and state property taxes.  The majority of this group includes seniors and lower-to-moderate-income households.

Opponents of the tax plan argue that it allows the government to continue pushing the financial benefits of homeownership versus renting.  However, it is important to understand that homeowners outnumber renters roughly 2-to-1.            San Diego investment property sales

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5 thoughts on “Federal Housing Bill Benefits Consumers who do not itemize their tax returns

  1. Many supposed beneficiaries of the 300 billion in FHA loans will be
    unable to qualify for these products. Many used no-doc loans to qualify
    the first time and, in truth, did not have the means to satisfy their
    debt obligations. In the current economy it is unlikely things have
    changed. San Diego Hotels

  2. As I understand the new rule.. the vacation home/income property change
    affects purchases after 2009… prior purchases are grandfathered.
    Begining in 2009 if you buy a vacation home and move into it for a short
    time you can only write off a portion of the capital gain.. i.e if you
    own a vacation home/ income prioperty say for 8 years and decide to rent
    out your primary home and move into the property for 4 years then sell
    to get exemption they divide the number of years you have owned the
    property by the number of years you occupied it as a primary residence
    and the percentage is what you use to calculate gain.. In the above
    example if you had a gain of $200,000 then you could excluded 50%( 8
    divided by 4) of the gain( $100,000) and the balance($100K) would be
    taxable at long term capital gain rates. Houston TX Lawyers

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