As you may be considering a purchase and sale in the year 2018, or simply question the impact of the New Tax Reform called the "Tax Cuts and Jobs Act”, below are a few highlights of how the new law may affect homeowners in their 2019 filing:
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It reduces the mortgage interest deduction limit to $750,000 for new loans taken out after 12/14/2017. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
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It eliminates the home equity deduction
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It retains current law treatment of capital gains from home sales. The 1031 Like Kind Exchange remains as well as the exclusion of gain on the sale of a primary residence
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It doubles the standard deduction (to $24,000 for married couples filing jointly), reducing the tax differential between renting and owning for more than 90% of tax payers.
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It limits the deduction for state and local income tax (SALT), real property tax, and sales tax (in the aggregate) to a maximum amount of $10,000. This $10,000 limit applies for both single and married filers and is not indexed for inflation.
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It preserves mortgage revenue bonds and Mortgage Credit Certificates
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It does not reinstate the deduction for mortgage insurance premiums