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
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
Interest remains deductible on second homes, but subject to the $1 million
/ $750,000 limits.
Deduction for State and Local Taxes
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.
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.
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.
is a Short Sale?
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.
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!