Pray for Snow……
I wish this picture was the Truckee/Tahoe area this evening…..We are in desperate need of snow. According to the weather forecast we have 4-5 days of precipitation in the forecast. Hoping/Praying it’s snow. It looks like by Thursday the temperatures are low enough that we will see some snow. I hope everyone is enjoying your Martin Luther King Holiday weekend.
2018 Tax Changes.
I had a chance to attend a great presentation on Tuesday morning, hosted by Guild Mortgage in Truckee about the 2018 Tax Law Changes. The information for the presentation is summarized below. There’s good news and bad news in my opinion. As always I recommend you consultant with a tax accountant or CPA if you have any questions.
Important info about Real Estate Tax Changes
Purchases: 1st Mortgages – What is Deductible?
Current homeowners are in the clear. But from now on, anyone buying a new home as a primary or secondary home will only be able to deduct the combined interest on both up to $750,000 of their mortgage debt. That’s down from $1 million. Taxpayers are still able to deduct points on an original purchase of a primary or secondary residence or amortize the points on a refinance. For primaries, currently, filers can deduct and unlimited amount for state and local property taxes. The final bill will have a $10,000 cap.
2nd Mortgages – What is Deductible?
Also known as home equity line of credit and fixed second home mortgages. The final tax bill also eliminates the deduction for interest on home equity loans. Currently that’s allowed on loans up to $100,000. The interest related to a second mortgage is deductible subject to the same limitations as a first mortgage. In general, the deduction of mortgage interest is based on how the funds are used and the limitations. Purchase seconds are still deductible.
Rental Properties Deductible Expenses -tax rules remain the same for 2018!
Homeowners who are selling their primary residence for a gain will still be able to exclude up to $500,000 (or $250,000 for single filers) from capital gains, so long as they’re selling their primary home and have lived there for two of the past five years.
Investment property owners will continue to be able to defer capital gain taxes using 1031 tax-deferred exchanges which have been in the tax code since 1921. No new restrictions on 1031 exchanges of real property were made in the new tax law. However, the new tax law repeals 1031 exchanges for all other types of property that are not real property. This means 1031 exchanges of personal property, collectibles, aircraft, franchise rights, rental cars, trucks, heavy equipment and machinery, etc. will no longer be permitted beginning in 2018