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Mon Nov 26, 2012, 08:00 PM

Mortgage Interest Deduction on the table in fiscal cliff talks?

A tax break that has long been untouchable could soon be in for some serious scrutiny.

Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families and the broader housing market.

But as President Obama and Congress try to hash out a deal to reduce the budget deficit, the mortgage interest deduction will likely be part of the discussion.

Limits on a broad array of deductions could emerge in any budget deal. It is likely that any caps would be structured to aim at high-income households, and would diminish or end the mortgage tax break for many of those taxpayers.


http://dealbook.nytimes.com/2012/11/26/mortgage-interest-deduction-once-a-sacred-cow-is-seen-as-vulnerable/?hp

12 replies, 1230 views

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Response to davidn3600 (Original post)

Mon Nov 26, 2012, 08:02 PM

1. Let The Pubs Own Eliminating That Deduction

It's a loser...

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Response to DemocratSinceBirth (Reply #1)

Mon Nov 26, 2012, 08:09 PM

2. Agree ...

it's suicide to support that

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Response to davidn3600 (Original post)

Mon Nov 26, 2012, 08:10 PM

3. If they did that, they should do what Canada does, and that is when you sell your principal

 

residence, you do not pay taxes on the sale.

This has another plus as well! It gives the home owner incentive to pay down the mortgage ASAP, so you don't get hit so badly with a housing bubble hitting the skids.

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Response to teddy51 (Reply #3)

Mon Nov 26, 2012, 08:12 PM

4. good luck with that. but i like the idea.

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Response to teddy51 (Reply #3)

Mon Nov 26, 2012, 09:51 PM

11. they already did that, back in Clinton's 2nd term

which was odd, considering that it was Dole's idea, and I could have sworn Dole lost.

That's sort of a big tax break for the rich, but it always was tax free if a person bought another home within a year, so I am really not sure how that shakes out.

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Response to davidn3600 (Original post)

Mon Nov 26, 2012, 08:16 PM

5. Well,THAT would sure fix the housing crisis.

People are just starting to buy houses again. Eliminating the mortgage deduction would not only discourage new buyers, it would make current housing payment too expensive for many and drive them out of their houses.
Wonderful idea, idnit?

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Response to Kablooie (Reply #5)

Mon Nov 26, 2012, 08:32 PM

9. Sorry to disagree......

 

The mortgage interest deduction was a give-away to home buyers. Renters were subsidizing home buyers especially in times where property values were appreciating.

Don't get me wrong. I fully support and think we should encourage home ownership but interest deduction is the wrong way and in fact a discriminatory way of achieving that objective. I suggest that eliminating capital gains taxes on the first $250K of profit on the sale of a home is more than adequate (a) inducement for people to purchase homes as an investment and (b) adequate compensation for the risk of home ownership.

How would eliminating this raise housing payments? Do you mean because they aren't getting a kickback at the end of the year they couldn't afford the payments? If that is the case then they were leeches on society by expecting the interest deduction to fund some of their mortgage payments.

If we retain this deduction (which I oppose and suggest we not tax gains) it should be limited to the first $250K. If people want a mansion then they bear that cost. This deduction should only be to provide for "reasonable" housing.

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Response to Swede Atlanta (Reply #9)

Mon Nov 26, 2012, 09:53 PM

12. again - that $250,000 is ALREADY the law of the land

just to be sure, I checked the google http://taxes.about.com/od/taxplanning/qt/home_sale_tax.htm

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Response to davidn3600 (Original post)

Mon Nov 26, 2012, 08:21 PM

6. What a brilliant idea....NOT!

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Response to davidn3600 (Original post)

Mon Nov 26, 2012, 08:24 PM

7. There are defensible restrictions that could be made, such as 2nd homes etc.

But, for primary residences <500k it should still be safe.

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Response to davidn3600 (Original post)

Mon Nov 26, 2012, 08:26 PM

8. we're going to pay off our mortgage in two weeks- so i don't care about that deduction any more.

 

25 years early...

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Response to davidn3600 (Original post)

Mon Nov 26, 2012, 09:02 PM

10. Ed Schultz said tonight that the real estate lobby is too powerful so it's very unlikely

that it is on the table. Just reporting what Ed said.......

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