January 1, 2018, President Donald Trump’s new 7 year tax reform law became effective.
These changes have altered deductions for homeowners and home sellers in several ways.
ONE
Interest caps reduce 25% on first and second properties purchased after December 14, 2017. Existing mortgages have been grandfathered from the cap.
TWO
Between December 31, 2017 and December 31, 2025, all state and local tax deductions (including property and sales taxes) have been capped at $10,000 (or $5,000 if married filing separately).
THREE
Today, the IRS will not recognize deductions on interest of home equity loans or lines of credit. Unless they are used to buy, build, or substantially improve the taxpayer’s home that secures the loan.
View examples here.
FOUR
If your property has been your primary residence for 2 out of 5 years before selling, you still qualify for capital gain exclusion.
FIVE
Only military personnel qualify for moving expenses to count as tax deductions.
Whether you’re a homeowner or home seller, it’s important to stay up-to-date on the latest news and legal updates that affect the mortgage industry. For more information contact one of our mortgage specialists today.
