first_img Pinterest E-Headlines Facebook Share. LinkedIn By CBN Real Estate Tax Extenders  Mortgage Cancellation Relief is extended for one year to January 1, 2014.The final act by the 112th Congress to avoid the fiscal cliff was a significant victory for homeowners. As a part of the legislation that cleared the U.S. House of Representatives late last night, Congress extended the cancellation of the mortgage debt relief provision for one year, through the end of 2013.What does this mean? If a lender forgives some portion of a homeowner’s mortgage in 2013, either as part of a short sale or foreclosure, or in a loan restructuring that reduces principal, the owner/seller will not be required to count that forgiven amount as income for tax purposes.Why is this important? Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received – and will never receive.More than 20 percent of current homeowners with a mortgage are in a distressed financial situation and owe more on their homes than the current market value.The housing market, while recovering, is still fragile enough that this tax relief is necessary to provide stability in the coming year.To learn more, please visit www.realtoractioncenter.org which provides a summary of all notable real estate-related provisions that were included in the legislation to avoid the fiscal cliff. Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012 Leasehold Improvements: the 15 year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012. Energy Efficiency Tax Credit: the 10 percent tax credit (up to $500) for homeowners for energy efficiency improvements to existing homes is extended through 2013 and made retroactive to cover 2012. Return of the “Pease” limitations on itemized deductions for high income filers Under the agreement so called “Pease Limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be reinstituted for high income filers.“Pease” limitations will only apply to individuals earning more than $250,000 and joint filers earning above $300,000. The thresholds are indexed for inflation so will rise over time.Under the formula, filers gradually lose the value of their total itemized deductions up to a total of a 20 percent reduction.First enacted in 1990, and named for the Ohio Congressman Don Pease who came up with the idea, the limitations continued throughout the Clinton years. The limitations were gradually phased out starting in 2003 and were completely eliminated in 2010-2012. NAR has never had an official position on Pease limitations. The reinstitution of these limits has far less impact on the mortgage interest deduction than a hard dollar deduction cap, percentage deduction cap, or reduction of the amount of MID that can be claimed.Capital Gains Capital Gains rate stays at 15 percent for those the top rate of $400,000 individual and $450,000 joint return. After that, any gains above those amounts will be taxed at 20 percent. The 250/500k exclusion for sale of principle residence remains in place.Estate Tax The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax. After that the rate will be 40 percent, up from 35 percent. The exemption amounts are indexed for inflation.www.Realtor.org Tumblr Twitter on January 8, 2013 Google+ National Association of Realtors Issues Brief on Real Estate Provisions in “Fiscal Cliff” Bill 0 Email On January 1, 2013 the Senate and House passed H.R. 8, legislation to avert the “fiscal cliff,” the bill will be signed by President Barack Obama on January 2, 2013. Following are a summary of real estate related provisions in the bill. Information forwarded by Linda Gardner, Principal Broker CRS, ABR, GRI, SFR, CSP, Bend Brokers Realty, Licensed in Oregonlast_img

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