Hi all,

Here is a link to an article in the newspaper, which outlines the new proposed income tax requirements...

http://www.azcentral.com/business/articles/1019taxreform19.html

While it affects all of the income, here is how it affects Real Estate:

"Two of the biggest tax breaks now available would be limited and redesigned to spread the benefits to more moderate- and low-income taxpayers. The home-mortgage interest deduction would be converted to a credit worth 15 percent of interest paid during the year, with a cap on the size of a mortgage eligible for the benefit."

I've read elsewhere that the cap would be at 300K.

What are your thoughts on this?

The article seems to be written by a person against the new rules as few positives are mentioned.

"Panelist Charles O. Rossotti, a former Internal Revenue Service commissioner, urged taxpayers and lawmakers not to jump to the conclusion that they would be worse off under their simpler plan.

"Take a look at what your bottom line is," he said."

But no info was given on possible positives.

Anyone has more info?

Thanks

"

The subcommittee's recommendations have been published in every newspaper and magazine. While the dollar amount varies, (I have seen 300K to 312K, the focus has been the median housing price for area of the home) not one publication has issued an opinion (in the article, plenty of opinion in the editorial sections) on the recommendations actually becoming IRS code.

The theory is only the high end of the tax bracket will be affected. With the elimination of the mortgage interest deduction, homeowners would now receive a tax credit. Adding to the mix would be the elimination of the Alternative Minimum Tax.

On another forum geared towards the consumer, the reaction was "no way this is going to pass." My own company (national lender) issued an email to over 2500 employees of the changes being considered, but made no mention to contact our legislators. (In doubt this will happen?) My desk sits in an office with over 200 licensed Realtors, reaction has been "this is serious - NAR is going to earn my dues this year." I believe the reception to the changes has been disbelief - CNN reports 9 out of 10 homeowners believe the change will not go through.

What I find troubling is the housing industry has propped our economy for the past two years and these changes could be perceived as knocking the crutch that is holding our economy together. Perception is key....our government monitors Consumer Confidence, as does Wall Street.

What I would hate to see are these changes moving forward without a healthy debate on their merits, just because everyone thought they had no chance of making it.