Real Estate Encyclopedia of Value


President Signs Tax Reform Bill
President Trump signed the Tax Cuts and Jobs Act tax reform bill. All individual provisions of the measure are generally effective after December 31, 2017 for the 2018 tax filing year and expire on December 31, 2025 unless otherwise noted. The provisions do not affect tax filings for 2017 unless noted.

Under this bill:

Mortgage Interest Deduction

The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.
Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.

Deduction for State and Local Taxes

The final bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.
The final bill also specifically precludes the deduction of 2018 state and local income taxes prepaid in 2017.

Supplemental Tax Calculator
When a change in ownership occurs you will receive a “one time” supplemental bill (or refund). If the change in ownership occurs between January 1 and May 31, two supplemental bills (or refunds) will be generated.

It is a gross understatement that we are living in a very unique time with regards to the economy and especially, real estate. This means that it may be necessary to do some unconventional thinking about our real estate assets.

What is a Short Sale?
A short sale in real estate occurs when the outstanding loan is greater than what the property can be sold for, and your lender agrees to accept less than the total owed. This is a basic outline of what we do for you.
1) Verify the value of your property.
2) Add up all the costs of selling the property by providing an estimate of closing costs.
3) Determine the amount owed against the property. This will be the total of all loans against the property.
4) Do the calculations. Subtract the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.
5) Contact the lender(s). I will find the specific department or manager to inform them of your situation.
6) Ask the lender what its procedures are for a short sale. Some lenders are willing to work with you, others will look to the agents involved to see it they are willing to make concessions to make the transaction happen. Still other lenders will tell you that your debt is your responsibility, one way or the other.
7) Sell the property.

This is a very complicated process! You must carefully choose the people who will represent you in the sale of your home. It is important to use a Realtor® with experience in foreclosure and short sale procedures! Call us before it's too late!

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