How does the new tax bill affect the purchase of real estate? There are a few different details we want to highlight.
First, we want to make it clear that we’re not tax experts. If you want to go more in depth on how these tax changes impact you, talk to a CPA. Also, this new tax information is not for the 2017 filing that we’re doing now, but for the 2018 filing that we’ll do at the beginning of 2019.
The first change you need to know about involves the mortgage interest deduction. The acquisition debt was lowered from $1 million to $750,000, so the interest you pay on a mortgage is deductible up to $750,000.
"If you want to go more in depth on how these tax changes impact you, talk to a CPA."
An additional good piece of news regarding this change involves the home equity debt. The home equity debt is tax deductible if you use that debt to purchase the house. Many times, you’ll see people use a first or second debt to purchase a home. In that case, the home equity debt is tax deductible.
On the flip side, they cut out the home equity tax deduction for things like making renovations, buying a car, or paying off credit debt.
Lastly, we heard that the MCC credit would be wiped out, but that credit is still in play. If you’re a first-time homebuyer, you can get an interest credit of up to $2,000 toward your taxes. That can also help you lower your debt-to-income ratio.
If you have any more questions about these changes or you need a referral for a good CPA, don’t hesitate to reach out to us. We’d be glad to help you.
Author:Bill Burns Phone: 919-725-2837 Dated: February 8th 2018 Views: 191 About Bill: ...
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